Create a PMO Charter for your Company

ISBN: 978-1-4665-6631-6

9 781466 566316

90000

Business Management / Project Management

This updated and completely revised edition of a bestseller extends the concepts and considerations of modern project management into the realm of project management oversight, control, and support. Illustrating the implications of project management in today’s organizations, The Complete Project Management Office Handbook, Third Edition explains how to use the project management office (PMO) as a business integrator to influence project outcomes in a manner that serves both project and business management interests.

Helping you determine if a PMO is right for your organization, this edition presents a five-stage PMO competency continuum to help you understand how to develop PMOs at different competency levels and associated functionalities. It also identifies five progressive PMO development levels to help you identify which level is best for your organization. Updates to this edition include:

• A refinement of the 20 PMO functions that guide PMO setup and operations

• A new section that provides an effective evaluation of PMO maturity indicators based on the prescribed 20 PMO functions presented in the handbook

• A new section on Establishing a Project Management Office that details a comprehensive process for determining the needs, purpose, and functionality for a new PMO

• Best practices that have cross-industry value and applicability

The book includes checklists, detailed process steps, and descriptive guidance for developing PMO functional capability. The up-to-date PMO model defined will not only help you better understand business practices in project management, but will also help you to adapt and integrate those practices into the project management environment in your organization.

For anyone associated with start-up and smaller PMOs, the book explains what can be done to create less rigorous PMO functional capabilities. It also includes helpful insights for those who need to specify and demonstrate “quick-wins” and early PMO-based accomplishments in their organization.

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K16277

The CompleTe projeCT managemenT offiCe handbook

Ger a rd M. Hill

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Third ediTion

K16277 cvr mech.indd 1 8/2/13 10:44 AM

The CompleTe projeCT managemenT offiCe handbook THIRD EDITION

ESI International Project Management Series Series Editor

J. LeRoy Ward, Executive Vice President ESI International, Arlington, Virginia

The Complete Project Management Office Handbook, Third Edition Gerard M. Hill • 978-1-4200-6631-6 • 2013

PgMP® Exam: Practice Test and Study Guide, Fourth Edition Ginger Levin and J. LeRoy Ward • 978-1-4822-0135-2 • 2013

PgMP® Exam Challenge! Ginger Levin and J. LeRoy Ward • 978-1-4822-0208-3 • 2013

PMP® Exam: Practice Test and Study Guide, Ninth Edition Ginger Levin • 978-1-4822-0224-3 • 2013

PMP® Exam Challenge! Sixth Edition J. LeRoy Ward and Ginger Levin • 978-1-4665-9982-6 • 2013

Determining Project Requirements, Second Edition: Mastering the BABOK® and the CBAP® Exam

Hans Jonasson • 978-1-4398-9651-8 • 2012

Team Planning for Project Managers and Business Analysts Gail Levitt • 978-1-4398-5543-0 • 2012

Practical Project Management for Building and Construction Hans Ottosson • 978-1-4398-9655-6 • 2012

Project Management Concepts, Methods, and Techniques Claude H. Maley • 978-1-4665-0288-8 • 2012

Program Management Complexity: A Competency Model Ginger Levin and J. LeRoy Ward

978-1-4398-5111-1 • 2011

Project Management for Healthcare David Shirley • 978-1-4398-1953-1 • 2011

Managing Web Projects Edward B. Farkas • 978-1-4398-0495-7 • 2009

Project Management Recipes for Success Guy L. De Furia • 978-1-4200-7824-4 • 2008

Building a Project Work Breakdown Structure: Visualizing Objectives, Deliverables, Activities, and Schedules

Dennis P. Miller • 978-1-4200-6969-3 • 2008

A Standard for Enterprise Project Management Michael S. Zambruski • 978-1-4200-7245-7 • 2008

The Complete Project Management Office Handbook, Second Edition Gerard M. Hill • 978-1-4200-4680-9 • 2007

The CompleTe projeCT managemenT offiCe handbook

ger a r d m. hill

THIRD EDITION

CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742

© 2014 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business

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v

Contents

Acknowledgments .......................................................................................xvii Author ..........................................................................................................xix Introduction .................................................................................................xxi

SeCtion i PRACtiCe MAnAGeMent

1 Project Management Methodology ........................................................3 Project Environment Interface Concepts......................................................5 Business Environment Interface Concepts ...................................................5 Project Management Methodology Activities across the PMO Continuum ........................................................................................... 6 Project Management Methodology Function Model ...................................8

Establish Basis for Project Management Methodology .......................8 Convene Methodology Development Team ...............................9 Prepare Methodology Deployment Strategy ............................10 Examine Current Practices ......................................................19

Develop Methodology Solution ........................................................22 Identify Methodology Components.........................................23 Design Life Cycle Processes .....................................................25 Develop Project Management Practices ...................................31 Introduce Methodology Platform ............................................33

Conduct Methodology Implementation ...........................................35 Plan Methodology Implementation .........................................35 Plan Project Transition ............................................................39 Conduct Methodology Training and Implementation ............ 42

Manage Methodology Maturity .......................................................43 Evaluate Methodology Implementation ...................................43 Analyze Methodology Performance ........................................ 44 Manage Methodology Maintenance ........................................45

Postscript for the Smaller PMO ................................................................ 46

vi  ◾  Contents

Establish Simple, Critical Processes for Project Management ...........47 Gain Increased Support for Process Expansion .................................47 Expand and Incorporate Technical and Business Processes ...............48

2 Project Management Tools ...................................................................51 Project Environment Interface Concepts....................................................52 Business Environment Interface Concepts .................................................54 Project Management Tools Activities across the PMO Continuum ............56 Project Management Tools Function Model ..............................................58

Select Project Management Tools .....................................................58 Identify the Need for Project Management Tools ....................59 Examine General Types of Project Management Tools ............60 Assess Specific Project Management Tools ...............................62 Acquire Project Management Tools ........................................ 64

Implement Project Management Tools .............................................65 Plan Tool Implementation .......................................................65 Plan Tool Transition ............................................................... 66 Conduct Tool User Training .................................................. 66 Conduct Tool Implementation ................................................67

Evaluate Tool Performance ...............................................................67 Identify and Resolve Utilization Problems ...............................68 Identify and Resolve Functional Problems ...............................68 Assess Overall Tool Effectiveness .............................................69

Postscript for the Smaller PMO .................................................................69

3 Standards and Metrics ..........................................................................71 Project Environment Interface Concepts....................................................72 Business Environment Interface Concepts .................................................73 Standards and Metrics Activities across the PMO Continuum ..................74 Standards and Metrics Function Model .....................................................76

Implement Project Management Standards ......................................76 Examine Standards Sources .................................................... 77 Identify Applicable Standards ..................................................80 Introduce Preferred Standards .................................................82 Conduct Benchmarking ......................................................... 84

Determine Project Metrics Requirements .........................................86 Identify Process Management and Improvement Metrics ........87 Identify Project Performance Metrics ......................................89 Identify Business Management Metrics ...................................92

Introduce and Use Project Metrics ....................................................94 Establish Metrics Measurement Plan .......................................94 Compare Metrics Performance ................................................95 Establish Corrective Actions ....................................................95

Postscript for the Smaller PMO .................................................................96

Contents  ◾  vii

4 Project Knowledge Management ..........................................................99 Project Environment Interface Concepts..................................................100 Business Environment Interface Concepts ............................................... 101 Project Knowledge Management Activities across the PMO Continuum .......................................................................................... 102 Project Knowledge Management Function Model ...................................102

Establish Knowledge Management Framework ..............................104 Information Management .....................................................105 Document Management ........................................................108 Process Management ............................................................. 110 Collaboration Management ................................................... 111 Project Archive and Reference Library Management ............. 114

Introduce Knowledge Management System .................................... 117 Conduct Installation and Establish Connectivity .................. 117 Perform Function and Feature Customization ....................... 117 Introduce Project Knowledge Management Content .............120

Implement Knowledge Management System ..................................121 Develop PMIS .......................................................................121 Develop Executive Dashboard ...............................................130 Construct Project Management Library ................................ 131 Implement Online Project Collaboration ..............................132 Implement Other Knowledge Management Tools .................134

Postscript for the Smaller PMO ...............................................................135

SeCtion ii inFRAStRUCtURe MAnAGeMent

5 Project Governance ............................................................................139 Project Environment Interface Concepts..................................................140 Business Environment Interface Concepts ............................................... 141 Project Governance Activities across the PMO Continuum .....................142 Project Governance Function Model .......................................................144

Prepare and Maintain PMO Charter ..............................................144 Define Business Purpose ........................................................146 Specify Organizational Alignment ........................................148 Highlight Functional Responsibility......................................148 Specify PMO Authority ......................................................... 149 Identify PMO Funding ......................................................... 150

Develop Project Management Policies ............................................ 150 Evaluate Policy Needs ............................................................ 151 Demonstrate Senior Management Support ............................ 151 Prepare Policy Guidance ........................................................ 152

Develop Project Classification Guidance ........................................ 154 Examine Project Classification Purpose ................................. 154

viii  ◾  Contents

Identify Project Classification Criteria ................................... 154 Implement Project Classification Guidance ........................... 157

Establish Project Manager Authority .............................................. 157 Establish Executive Control Board ................................................. 159

Determine Executive Oversight Requirements ......................160 Set Control Board Parameters ............................................... 161 Prepare Control Board Operating Procedures .......................162

Align Business and Technical Committees .....................................163 Postscript for the Smaller PMO ...............................................................164

6 Assessment .......................................................................................... 167 Project Environment Interface Concepts..................................................168 Business Environment Interface Concepts ...............................................168 Assessment Activities across the PMO Continuum ..................................169 Assessment Function Model .................................................................... 171

Conduct Competency Assessments ................................................. 171 Identify Competency Assessments ......................................... 172 Perform Competency Assessments ......................................... 173 Implement Competency Improvement Plans ......................... 174

Conduct Capability Assessments .................................................... 175 Identify Capability Assessments ............................................ 175 Perform Capability Assessments ............................................177 Implement Capability Improvement Plans............................. 179

Conduct Maturity Assessments ......................................................180 Identify Maturity Assessments ............................................... 181 Perform Maturity Assessments ..............................................182 Implement Maturity Advancement Plans ..............................184

Postscript for the Smaller PMO ............................................................... 185

7 Organization and Structure ...............................................................187 Project Environment Interface Concepts..................................................188 Business Environment Interface Concepts ...............................................188 Organization and Structure Activities across the PMO Continuum ........188 Organization and Structure Function Model ...........................................189

Set Up the PMO Structure ............................................................. 191 Identify Staff Needs for PMO Functions ...............................192 Introduce PMO Staff ............................................................. 195 Analyze and Establish PMO Relationships ............................196

Establish Project Team Structure ....................................................198 Specify Project Team and PMO Relationship ........................198 Define Standard Project Team Structure ...............................202 Define Extended Project Team Alignment ............................205

Develop Stakeholder Participation ................................................. 208 Manage Internal Project Team Stakeholders ..........................209

Contents  ◾  ix

Manage Internal Oversight Stakeholders ............................... 210 Manage Internal-Support Stakeholders.................................. 211 Manage Customer Stakeholders ............................................212 Manage Vendor/Contractor Stakeholders .............................. 214 Manage Other Project Stakeholders ...................................... 215

Postscript for the Smaller PMO ............................................................... 216

8 Facilities and Equipment Support ...................................................... 219 Project Environment Interface Concepts................................................. 220 Business Environment Interface Concepts ...............................................221 Facilities and Equipment Support Activities across the PMO Continuum .... 221 Facilities and Equipment Support Function Model .................................223

Establish Project Team Requirements .............................................224 Establish Work Space Requirements ......................................224 Establish Equipment Requirements ...................................... 226

Manage Project Facilities ................................................................229 Manage Facility Acquisition Options ....................................230 Monitor Facility Utilization ...................................................232 Monitor Facility Disposition ................................................ 234

Manage Project Equipment ............................................................236 Manage Equipment Acquisition ............................................236 Manage Equipment Assignments ..........................................238 Manage Equipment Disposition ............................................240

Postscript for the Smaller PMO ...............................................................241

SeCtion iii ReSoURCe inteGRAtion

9 Resource Management .......................................................................245 Project Environment Interface Concepts................................................. 246 Business Environment Interface Concepts .............................................. 246 Resource Management Activities across the PMO Continuum ................247 Resource Management Function Model ..................................................249

Acquire Project Resources ...............................................................249 Identify Resource Providers ................................................... 251 Establish Resource Requirements ..........................................253 Fulfill Resource Requests .......................................................254

Assign Project Resources ................................................................. 255 Prepare Resource Assignment Notifications ........................... 255 Obtain Individual Resource Commitments ...........................256 Introduce Resources to the Project Team ...............................256

Deploy Project Resources ................................................................256 Perform Deployment Administration ....................................257 Identify and Arrange Relevant Training ................................259 Monitor Travel Arrangements .............................................. 260

x  ◾  Contents

Manage Resource Performance ...................................................... 260 Develop Performance Management Guidance .......................261 Conduct Project Resource Performance Reviews ...................262 Monitor Project Resource Performance .................................263

Close Project Resource Assignments .............................................. 264 Coordinate Resource Extensions ...........................................265 Facilitate Resource Transfers and Reassignments ...................265 Manage Resource Terminations ............................................265

Postscript for the Smaller PMO .............................................................. 266

10 Training and Education .....................................................................267 Project Environment Interface Concepts................................................. 268 Business Environment Interface Concepts .............................................. 268 Training and Education Activities across the PMO Continuum ..............269 Training and Education Function Model ................................................271

Establish Training Program ............................................................271 Assess Training Needs ...........................................................272 Determine Training Requirements ........................................273 Identify Training Resources ..................................................275 Prepare Training Plan ............................................................277 Select and Develop Training Courses ....................................279

Manage Training Program ............................................................ 280 Establish Training Registration Capability ............................281 Publicize and Promote Training Program ..............................282 Conduct Project Management Training ................................283

Evaluate Training Program ............................................................ 284 Evaluate Training Plan Implementation ................................285 Evaluate Training Resources ..................................................285 Update Training Program .................................................... 286

Postscript for the Smaller PMO ...............................................................287

11 Career Development ...........................................................................289 Project Environment Interface Concepts..................................................290 Business Environment Interface Concepts ...............................................291 Career Development Activities across the PMO Continuum ...................291 Career Development Function Model ......................................................293

Develop Project Management Career Path .....................................294 Establish Project Management as a Professional Discipline ....................................................................... 294 Develop Basis for Executive Support .....................................295 Define Career Advancement Model .......................................298 Construct Position Descriptions and Qualifications ............. 304 Integrate New Career Path into the Organization ................ 306

Support Project Management Career Planning ...............................307

Contents  ◾  xi

Provide General Career Guidance ........................................ 308 Promote Business Skill Development .....................................309 Implement Career Planning Support ..................................... 310

Establish Professional Certification ................................................. 311 Develop Project Management Certification Program ............ 311 Facilitate Technical and Professional Certification ................ 314

Postscript for the Smaller PMO ............................................................... 314

12 Team Development ............................................................................. 317 Project Environment Interface Concepts.................................................. 318 Business Environment Interface Concepts ............................................... 318 Team Development Activities across the PMO Continuum ..................... 319 Team Development Function Model .......................................................321

Facilitate Cohesive Team Formation ...............................................321 Examine Project Team Composition .....................................321 Develop Project Team Orientation Program ..........................324 Integrate Vendors and Contractors ........................................325

Facilitate Virtual Team Management .............................................327 Establish Virtual Team Alignment ........................................327 Facilitate Virtual Team Interactions ......................................329 Introduce Virtual Team Technology......................................332

Enable Project Team Development .................................................333 Promote Team Skill Learning ................................................333 Develop Project Manager Tools and Techniques ...................334 Facilitate Leadership Development ........................................335

Monitor Project Team Performance ................................................337 Assess Team Dynamics ..........................................................337 Examine Team Effectiveness..................................................338 Conduct Team Improvement Activities .................................339

Postscript for the Smaller PMO ...............................................................341

SeCtion iV teCHniCAL SUPPoRt

13 Mentoring ...........................................................................................345 Project Environment Interface Concepts................................................. 346 Business Environment Interface Concepts .............................................. 348 Mentoring Activities across the PMO Continuum .................................. 348 Mentoring Function Model .....................................................................350

Establish Project Management Mentoring Program .......................350 Develop the Mentoring Approach ......................................... 352 Identify Mentor–Protégé Roles and Responsibilities ..............357 Determine Mentor Sourcing Process .....................................362

Engage Project Management Mentors ........................................... 366

xii  ◾  Contents

Identify Mentor Candidates ................................................. 366 Conduct Mentor Candidate Qualification .............................367 Prepare Project Management Mentors ...................................368

Conduct Project Management Mentoring ......................................369 Identify Engagement .............................................................370 Assign Mentor(s) ....................................................................370 Prepare for Mentoring Engagement .......................................371 Perform Mentoring Engagement Activities ............................372 Close Out Mentor–Protégé Relationship ...............................372

Evaluate Mentoring Program ..........................................................373 Evaluate Mentor Performance................................................373 Monitor Mentoring Program Results ..................................... 374

Postscript for the Smaller PMO ............................................................... 374

14 Project Planning .................................................................................377 Project Environment Interface Concepts..................................................378 Business Environment Interface Concepts ...............................................379 Project Planning Activities across the PMO Continuum .........................379 Project Planning Function Model ............................................................381

Establish Project Planning Capability .............................................382 Define Project Plan Components ...........................................382 Implement Project Planning Processes and Tools ..................384 Establish Planning Facilitation and Support Capability ........389

Facilitate Project Planning Workshop .............................................393 Manage Planning Workshop Arrangements ..........................393 Facilitate Project Work Plan Development ............................396 Perform Follow-Up Planning Support ...................................398

Administer Project Planning .......................................................... 400 Specify Primary Project Management Plans ......................... 400 Recommend Essential Project Support Plans .........................413 Prepare Project Plan Content Guidance ................................ 416 Evaluate Project Planning ...................................................... 417

Postscript for the Smaller PMO ...............................................................421

15 Project Auditing .................................................................................423 Project Environment Interface Concepts..................................................424 Business Environment Interface Concepts ...............................................425 Project Auditing Activities across the PMO Continuum ..........................425 Project Auditing Function Model ............................................................427

Set Up Project Auditing Capability ............................................... 428 Determine Project Auditing Needs ....................................... 428 Identify Project Auditing Resources ......................................438 Establish Project Audit Performance Points ...........................441

Conduct Project Auditing .............................................................. 442

Contents  ◾  xiii

Prepare for Project Audits and Reviews ................................ 443 Conduct Project Audit ...........................................................445 Prepare Project Audit Report ................................................ 446

Manage Project Auditing Results ....................................................447 Review Project Audit Results .................................................447 Analyze Aggregate Program Results ......................................449 Monitor Project Audit Follow-Up Actions .............................450

Postscript for the Smaller PMO ...............................................................450

16 Project Recovery .................................................................................453 Project Environment Interface Concepts..................................................454 Business Environment Interface Concepts ...............................................454 Project Recovery Activities across the PMO Continuum ......................... 455 Project Recovery Function Model ............................................................457

Develop Recovery Assessment Process ............................................458 Identify Recovery Indicators ..................................................458 Assess Project and Identify Problem Areas ............................ 460 Prepare Project Recovery Decision Package .......................... 466 Coordinate Project Recovery Decision ..................................467

Plan and Conduct Project Recovery............................................... 468 Establish Project Recovery Team .......................................... 468 Develop Project Recovery Plan ..............................................473 Stabilize Project Using Recovery Solution .............................475 Conclude Project Recovery ....................................................478

Capture Recovery Lessons Learned ............................................... 480 Examine Project Management Indicators ............................. 480 Examine Project Selection Criteria ....................................... 480 Examine Project Recovery Process .........................................481 Update Routine and Project Recovery Remedies ...................482

Postscript for the Smaller PMO ...............................................................482

SeCtion V BUSineSS ALiGnMent

17 Project Portfolio Management ...........................................................487 Project Environment Interface Concepts..................................................488 Business Environment Interface Concepts ...............................................488 Portfolio Management Activities across the PMO Continuum ................489 Project Portfolio Management Function Model ....................................... 491

Set Up Project Portfolio Management ............................................ 491 Validate Business Strategy and Interests ................................491 Identify Project Selection Criteria ..........................................494 Determine Project Selection Mechanism ...............................498 Identify Project Portfolio Management Roles ........................505 Establish a Supportive Project Environment ..........................509

xiv  ◾  Contents

Perform Project Selection ................................................................ 511 Conduct Project Screening .................................................... 512 Develop Project Business Plan ............................................... 514 Develop Project Resource Allocation Plan .............................520 Conduct Project Selection .....................................................523

Integrate Projects in the Portfolio ...................................................524 Validate Project Selection ......................................................525 Determine Project Priority.....................................................525 Approve Initial Project Funding ............................................526

Conduct Project and Portfolio Reviews ..........................................527 Compile Project Performance Information ............................527 Conduct Project Gateway Reviews ........................................528 Conduct Portfolio Reviews ....................................................532

Manage Portfolio Attrition .............................................................534 Perform Project Closeout ....................................................... 535 Assess Strategic Advantage .....................................................536 Assess Customer Satisfaction .................................................537

Postscript for the Smaller PMO ...............................................................537

18 Customer Relationship Management .................................................539 Project Environment Interface Concepts................................................. 540 Business Environment Interface Concepts ...............................................541 Customer Relationship Management Activities across the PMO Continuum ..............................................................................................541 Customer Relationship Management Function Model ........................... 543

Manage Customer Relationships ................................................... 544 Manage Customer Project Opportunity Information ........... 544 Manage Customer Business Information ...............................545 Manage Customer Project Participation ................................547

Manage Customer Contracts ..........................................................548 Produce and Manage Customer Proposals .............................549 Establish Customer Contracts ...............................................554 Conduct Customer Contract Administration ........................ 555

Manage Customer Satisfaction .......................................................561 Measure Customer Satisfaction .............................................562 Conduct Customer Relationship Programs ........................... 564 Implement Customer-Centric Improvements ........................565

Postscript for the Smaller PMO ...............................................................567

19 Vendor/Contractor Relationship Management ..................................569 Project Environment Interface Concepts..................................................570 Business Environment Interface Concepts ...............................................570 Vendor/Contractor Relationships Activities across the PMO Continuum ...571

Contents  ◾  xv

Vendor/Contractor Relationships Function Model ..................................571 Manage Vendor/Contractor Relationships ......................................573

Identify Vendor and Contractor Needs ..................................573 Manage Vendor and Contractor Information ........................575 Prescribe Vendor and Contractor Participation ......................577

Manage Vendor/Contractor Acquisition .........................................579 Identify and Qualify Vendors and Contractors ......................579 Solicit Vendor and Contractor Proposals ...............................581 Prepare Vendor and Contractor Contracts .............................584

Manage Vendor/Contractor Performance .......................................585 Administer Vendor and Contractor Contracts .......................585 Monitor Vendor and Contractor Performance .......................590

Postscript for the Smaller PMO ...............................................................592

20 Business Performance Management ...................................................595 Project Environment Interface Concepts..................................................596 Business Environment Interface Concepts ...............................................596 Business Performance Management Activities across the PMO Continuum ..............................................................................................597 Business Performance Management Function Model ..............................599

Develop Integrated Business Solutions ........................................... 600 Demonstrate Project Management Business Value ............... 600 Generate Executive Value Awareness .................................... 606 Align Business and Project Management Performance ......... 609

Manage Business Collaboration ...................................................... 611 Conduct Operational Business Collaboration ........................ 611 Conduct Tactical Business Collaboration .............................. 613 Conduct Strategic Business Collaboration ............................. 614

Manage PMO Business Fulfillment ................................................ 615 Manage PMO Business Function Evolution .......................... 615 Develop PMO and Enterprise Business Alignment ................620

Postscript for the Smaller PMO ...............................................................623

Appendix A ..................................................................................................625

Appendix B ..................................................................................................657

xvii

Acknowledgments

Since the previous edition of this handbook was issued, I’ve had the opportunity to engage a few more clients and business program participants to discuss and apply prominent project management office (PMO) concepts that are considered within this publication. I was pleased to find that guidance from this PMO handbook enabled many managers across diverse industries to develop a common frame of reference in their efforts to examine and implement solutions that produced PMO capability and business results within their organizations.

In that time, as an invited speaker and consultant, I also traveled to present these PMO handbook concepts at client and public forums in Milan, Rio de Janeiro, Athens, Warsaw, and Sao Paulo, as well as a few venues in the United States. While I was sometimes a stranger in foreign lands, I was readily welcomed by groups and individuals who knew of me through their personal use of the PMO and meth- odology books I have published. My interactions with old and new acquaintances alike prompted hearty and valuable discussions that have distinctly influenced the content of this third edition. I am grateful for all of the feedback, concept discus- sions, innovative suggestions, and practical insight that were shared with me by participants in client engagements and at programs that I attended. I continue to learn a great deal about my professional interests from the experiences of other professionals.

The publisher’s request to prepare this third edition was also very gratifying; it meant that my work has been well received by professionals in project management as well as an array of business managers in a variety of industries. Therefore, I would again like to extend my sincere appreciation to all readers, as well as to all those who have reviewed and promoted or endorsed this publication.

The initial publication of The Complete Project Management Office Handbook was created during my tenure with ESI International, when I served as vice presi- dent of technical services. I continue to recall that period of my career with genuine appreciation for my affiliation with ESI, especially for the encouragement and sup- port provided by my colleagues on the executive management team that enabled my original work to be published.

xviii  ◾  Acknowledgments

I am still pursuing professional project management and business interests through my work as an independent consultant. I started my consulting practice several years ago as Hill Consulting Group, and that has transitioned to become Hill Methods, LLC. However, I continue to refine the products and services of my earlier work for practical use today. In particular, since the last edition of this PMO handbook, I have authored an accompanying publication, The Complete Project Management Methodology and Toolkit (CRC Press, 2010). This publication provides general cross-industry methodology guidance for effective project management, and it includes a comprehensive tool kit of 96 tools on diskette.

Finally, and once again, this third edition was made possible by the love, encouragement, and support of my wife, Rita, who continues to shine a persistent light on the paths I take to pursue my life’s work and my professional interests.

Gerard M. Hill [email protected]

xix

Author

Gerard Hill is the Principal of Hill Methods, LLC, and has more than 25 years experience in project management practice design and implementation, information systems integration, and business process engineering. His specialty is enabling busi- nesses to gain and sustain a competitive edge through development and implementa- tion of total-practice project management solutions. He has conceived and constructed processes and practices that have enabled Fortune 100 and other client organizations to realize maximum benefit from their investment in project management.

Prior to introducing Hill Methods (formerly Hill Consulting Group), Mr. Hill was with ESI International, where he served as Vice President of Technical Services. His work included responsibility for international consulting programs, technical product design and development, and knowledge management. He also served as an instructor and frequent public forums speaker during his tenure with ESI.

Mr. Hill, as an internationally recognized thought leader, has led or contributed to the design and development of project management methodologies currently deployed by organizations around the world. He is the architect of capability and maturity assessments for business and project management. He also has particular expertise in designing and developing practical Project Management Office (PMO) solutions.

His recent work includes development of the new matrix-based ProjectPRISM Project Management Methodology, and this has been introduced in his new proj- ect management methodology publication. He has refined an approach to “PMO design and implementation” in a workshop based on the content of his PMO hand- book publication. In recent years, Mr. Hill has chaired two annual and national- scope Project Portfolio Management conferences in the United States. In 2008 he was an invited keynote speaker and presenter at two professional conferences in Milan, Italy; in 2009 he was a keynote speaker and presenter at the National PMI Project Management Meeting in Rio de Janeiro, Brazil, and at the Greece PMI Chapter Congress in Athens, Greece; and in 2010 he was an invited guest speaker at the PMI Poland Congress in Warsaw, Poland. He has also written articles pub- lished in professional journals around the world, and he has presented in webinars and at technical conferences and forums.

xx  ◾  Author

Mr. Hill’s broad competencies are based on an extensive educational back- ground that includes a bachelor’s degree in Applied Mathematics (North Carolina State University), a master’s degree in Human Resource Management/Organization Development (Pepperdine University), and completion of the Advanced Management Program for Executives (Duke University, Fuqua School of Business).

Mr. Hill also holds a Master’s Certificate in Project Management from The George Washington University, and he is certified as a Project Management Professional (PMP) by the Project Management Institute.

Mr. Hill is the author of two books: The Complete Project Management Office Handbook, 2nd Edition (Auerbach Publications, 2007), and The Complete Project Management Methodology and Toolkit (CRC Press, 2010), which includes 96 tools on CD.

xxi

introduction

Concept overview During the past few decades, modern project management precepts have emerged to instill a vitalized, professional approach to project management across countless industries. Individual capabilities in project management have been strengthened and enlarged through a combination of developments in project management pro- cesses and practices, implementation of training programs, and introduction of automated tools that use advanced design concepts and technology. As a result, today’s project managers who practice these principles find themselves in the dual roles of a technical expert in a particular specialty or discipline as well as the busi- ness leader for the project.

The Complete Project Management Office Handbook extends these modern proj- ect management concepts and considerations into the scope of project manage- ment oversight, control, and support. It recognizes the need for an organizational entity—the project management office (PMO)—to perform in a capacity that achieves one or more of these three operational objectives. It positions the PMO as a business integrator—whether in a role that is limited to managing multiple projects as a program or expanded to serve as a business unit representing the organization’s project management environment—to encompass all the people (project stakehold- ers), processes (methodologies and practices), and tools (automated systems and work aids) that manage or influence project performance. In either case, the PMO helps both the project manager and the relevant organization to understand and apply professional practices of project management and to adapt and integrate busi- ness interests into the project management environment with which it is associated.

The relevant organization is the business unit or department that is influenced by PMO functions and that receives direct business benefits from PMO operations. As such, it is both the primary “customer” and the governing body of the PMO. In contrast, the sponsoring organization is that business unit or department that designs and implements the PMO capability, provides PMO resources, and holds

xxii  ◾  Introduction

responsibility for PMO functional and operational capability. That is to say, the sponsoring organization may be a business component of the relevant organization. Ideally, these two organizations are the same entity; this is normally the case when the PMO is first established. However, it is not uncommon for a sponsoring orga- nization to establish a PMO for its own purpose and then see it emerge over time to serve the broader interests of a larger relevant organization or even the full busi- ness enterprise. Hence, the alignment of the PMO within the relevant organization structure can be an indicator of its authority and responsibility, it and presents a major point of deliberation for PMO designers. Nevertheless, the depth and extent of PMO functional responsibility will usually guide its placement within a relevant organization, which can be adjusted as organizational needs warrant.

The Complete Project Management Office Handbook focuses on what can be done to establish the depth and extent of PMO functional responsibility that the relevant organization requires. This is presented through two primary perspectives. First, The Complete Project Management Office Handbook considers five stages of PMO capability along a competency continuum. These represent progressive stages of PMO development and capability categorized specifically as a frame of reference. Each PMO stage suggests a particular level of functional capability that the PMO will have achieved if functions are fully implemented. The five PMO stages are also indicative of organizational maturity in project management, with the PMO’s role and responsibilities advancing from project management oversight and control at the lower end of the competency continuum to strategic business alignment at the higher competency stages.

The second focus of The Complete Project Management Office Handbook is in the presentation of 20 function models that can be used to guide deliberation and devel- opment of PMO operational capability. These models suggest what capability can be realized through comprehensive implementation of each PMO function. Note that the actual implementation of PMO functions in an organization will undoubtedly be refashioned as adaptations of the function models presented in this handbook, depending on the appropriate use and fit within the relevant organization.

The following sections describe the PMO competency continuum, the PMO functions, and the underlying concepts regarding the context and considerations for PMO implementation.

the PMo Competency Continuum The PMO competency continuum provides a vehicle that defines a series of pro- gressive PMO stages of development that can be examined for application in an organization. The naming convention is relatively simple and somewhat consistent with PMO implementation efforts across most industries. However, these names provide only a frame of reference; other names can be applied as appropriate to the nature of PMO responsibilities and the business environment in which it operates.

Introduction  ◾  xxiii

Five general stages of PMO competency are prescribed for consideration. Figure 0.1 presents an overview of the PMO competency continuum and a description of each of its stages. These five PMO stages represent a progressive competency and advancement of functionality that can be attained to meet the needs of the project management environment and the associated business objectives of the rel- evant organization. It is presumed that a higher-stage PMO has already achieved the competencies prescribed for any lower-stage PMOs. Thus, if an organization wants to establish a stage 3 standard PMO, it will also have to ensure that it has first realized the competencies prescribed for stage 1 and stage 2 PMOs. It is also possible that a PMO at any stage can pursue activities at any level to address the needs within the relevant organization, which is far more important than stepping through levels of competency in sequence. Moreover, it is critical to discern the approximate level of PMO competency that the relevant organization needs. Not every organization needs to have a PMO at stage 5. In fact, for most organizations, the stage 3 standard PMO is probably more than adequate.

The following subsections provide a descriptive overview of each stage in the PMO competency continuum.

Stage 1: The Project Office The stage 1 PMO is the fundamental unit of project oversight in the project manage- ment environment. The project office is created as a domain of the project manager,

Strategic alignment

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PMO director Dedicated PMO technical and support staff

Vice president or director of project management Dedicated PMO technical staff Enterprise-wide support staff

Figure 0.1 overview of PMo capabilities across the PMo competency continuum.

xxiv  ◾  Introduction

who is responsible for the successful performance of one or more projects. It provides the capability to ensure professionalism and excellence in applying widely accepted principles and preferred project management practices to each project effort.

However, more than one project office may exist within an organization. When this occurs, an obvious challenge lies in ensuring that each project office pursues a common approach to project management. Ideally, senior members of the project management staff will collaborate in their design and implementation of project office capability. Alternatively, a single, higher-level PMO can be established to guide and support project office activities.

The inclusion of the project office in the PMO competency continuum is argu- ably an uncertain fit. By definition, it does not influence actions and activities of more than one project manager; it has no program-level authority or direct strategic business relevance; and it does not fulfill the traditional role of a PMO. However, the project office implements and monitors the “rules of project performance” at the project team level, and that oversight in itself is a responsibility of PMOs at all levels. Thus, the placement of the project office at the beginning of the PMO competency continuum ensures that effective project management oversight at the project level is considered and implemented in the context of PMO responsibility.

The project office performs a variety of essential project management activities, including the following:

◾ Applying principles and practices of modern project management, through the skill and knowledge of the project manager, to ensure that successful project performance is achieved. The project office concentrates on producing deliverables associated with project objectives, and it manages the vital signs of each project effort—cost, schedule, and resource utilization. Managing these details invariably enhances examination of project performance and facilitates the application of corrective actions to any problems that are identified.

◾ Serving as the direct interface to project team performance management. Because most project teams likely have a technical performance focus, the project office will introduce and facilitate using the elements of project man- agement. Accordingly, the project office provides for differentiation between the technical methods, which are prescribed to create an excellent technical product, and the use of project management methods, which are prescribed to ensure project and business success.

◾ Applying organizational guidance in the form of policies, standards, execu- tive decisions, and so forth to each project effort. The project office also acts as the frontline point of supervision for implementing and integrating business processes in the project management environment.

◾ Serving as the first level of project oversight and, sometimes, the high- est level of technical oversight. Whereas higher-stage PMOs may mandate and introduce technical methods and procedures, it is the project office that

Introduction  ◾  xxv

implements them in the project management environment. Indeed, at this level, there is probably less emphasis on business issues, unless the project manager has the double duty of serving also as a program manager.

The project office’s role is that of implementer, applying most PMO functions. It carries the policies, practices, and guidance prescribed by higher authority— possibly higher-stage PMOs above it—into the project management environment for project team implementation. Yet the project office does not have to achieve advanced levels of functionality beyond the one or several projects it supports. Rather, a project office can exist formally in name or informally by virtue of its responsibility for project and project team performance. The formal project office can examine its roles in each of the PMO function models as a means to create a complete and comprehensive project oversight capability.

Stage 2: The Basic PMO Stage 2, or basic PMO, is the first PMO level that deals with multiple project over- sight and control. It furnishes the capability to provide aggregate oversight and con- trol of multiple projects relative to the performance of multiple project managers.

In some industries, this stage is traditionally known as the “program office” and represents the domain of the program manager. It is possible that there could be more than one basic PMO in the relevant organization—one for each program manager. However, it is not practical for every program manager to independently build the comprehensive capability that is prescribed here. Therefore, in the context of The Complete Project Management Office Handbook, the basic PMO is presumed to be the highest centralized entity of project management that pursues its mission under the leadership and guidance of one designated program manager.

The basic PMO will likely have minimal staff, in some cases just one individual assigned to build the PMO’s capability. Presumably, this person will be assigned full time to the PMO effort and have access to at least a few additional part-time support resources. This staffing arrangement is essential to accomplish the pre- scribed functionality of the basic PMO. An initiative that is fully supported finan- cially and appropriately resourced should be able to achieve basic PMO capability and prescribed functionality within 1 year or less. This time, however, may vary based on the business commitment and culture of the relevant organization.

With an emphasis on establishing control in the project management environ- ment, the basic PMO performs a variety of centralized project management activi- ties, including the following:

xxvi  ◾  Introduction

◾ Having primary responsibility for establishing a standard approach to how project management is conducted in the relevant organization. This includes the introduction of common tools, repeatable processes, and preferred prac- tices, ideally represented by implementation of a comprehensive project man- agement methodology.

◾ Providing the means to compile aggregate results and analyses of project sta- tus and project progress as a basis for identifying and responding to project variations, evaluating project and project manager performance, and ensur- ing the achievement of project objectives.

◾ Introducing project management as a professional discipline in the relevant organization through its prescription of applicable standards, designation of qualified project managers, training and empowerment of project teams, and specification of roles and responsibilities of stakeholders in the project man- agement environment.

The basic PMO has responsibility for implementing capability across all PMO functions. Nevertheless, most of that capability is fundamental and emphasizes establishing the foundation of a viable project management environment. As a result, the new stage 2 PMO will likely be treading new ground within the relevant organization; functional capability advancements may initially be slow as busi- ness units become accustomed to the PMO’s presence, accept transition of certain responsibilities to the PMO, and evolve with greater reliance on PMO management capability to achieve business interests associated with project oversight and con- trol. Conversely, the new basic PMO must demonstrate its full alignment within the relevant organization and its professionalism in the practice of project manage- ment. This often requires the PMO to be proactive in planning its functionality and prepared to defend its business position.

Stage 3: The Standard PMO The stage 3 PMO is central to the PMO competency continuum, representing the essence of a complete and comprehensive PMO capability. While it continues to address project management oversight and control, the stage 3 PMO introduces a new focus on support that optimizes individual and project performance in the project management environment. Its purview ranges from managing multiple projects and multiple project managers and may even include overseeing or other- wise aligning with one or more program managers.

The standard PMO can evolve from earlier efforts to construct a basic PMO. It can also be designed and implemented as the initial “from-scratch” effort to intro- duce centralized oversight, control, and support in the project management envi- ronment. If a new PMO at the standard PMO level is to be pursued, the designers and developers must ensure that functionality prescribed for the basic PMO is incorporated into their PMO design and implementation plans.

Introduction  ◾  xxvii

Stage 3 PMO functionality is the solution for organizations seeking to implement project management as a core business competency or otherwise looking to improve project management capability or increase project management maturity. The new stage 3 PMO necessitates minimal staffing of a full-time PMO manager or director and at least two additional full-time and part-time staff members qualified to perform and facilitate PMO functionality design and implementation. Furthermore, the extent of standard PMO functionality may warrant some part-time, possibly extended involve- ment from other participants in the project environment, as well as potential participa- tion of business units in the relevant organization. As functionality is established, it is likely that a few more full-time staff members will be needed to fulfill professional specialty positions. As this PMO grows, additional full- and part-time administrative support personnel also will be required. The assignment of these resources, along with distinct executive business commitment to the effort, should enable complete stage 3 PMO functionality to be achieved within a 2- to 3-year time frame. Of course, timely deliberation and planning of operational needs and priorities, along with assignment of adequate initial resources, will enable significant PMO functionality to be imple- mented within a matter of months. Initial standard PMO operating capability nor- mally can be realized within the first year of the implementation initiative.

The standard PMO performs complete centralized project management over- sight and control activities, with an added emphasis on introducing process and practice support in the project management environment. These activities include the following:

◾ Serving as the centerpiece of project management support in the relevant organization—a project management resource for business units, a profes- sional practice facilitator for project managers and project team members, and a coordinator and collaborator for project stakeholders (e.g., resource managers, customers, vendors, and management) activity and involvement.

◾ Functioning as the interface between the business environment and the proj- ect management environment. The standard PMO translates, as appropri- ate, policy and executive guidance for project performance and implements actions and activities associated with strategic business interests and objec- tives in the project management environment.

◾ Acting as the facilitator of project management environment process and prac- tice design and as a catalyst for project management excellence. This extends from attending to project management methodology development and practices used to assure project success to introducing project reporting tools and collabo- ration practices, to providing executive support processes regarding matters of project governance, project portfolio management, and business performance.

◾ Serving as the representative of the project management environment to the senior executive of the relevant organization and participating in or pos- sibly convening and leading associated control boards comprising execu- tives and senior managers. As such, the standard PMO can be the relevant

xxviii  ◾  Introduction

organization’s project management representative to business and industry affiliates, partners, and professional institutions.

◾ Operating as the recognized organizational entity that directly or indirectly influ- ences resource participation on projects, to include addressing such matters as project resource acquisition, qualification, training, assignment, and evaluation.

The standard PMO has responsibility for implementing a complete capability across all designated PMO functions. It should examine the needs of the project management environment in each of the 20 prescribed PMO function models pre- sented in this handbook. It will therefore be challenged to adapt each function model for optimized operational fit and maximized business benefit within the relevant organization. It should be reiterated that not every PMO needs to develop full or any capability in all 20 function areas. However, the PMO established at the standard level should at least consider every option for functionality.

Stage 4: The Advanced PMO The stage 4 PMO normally evolves from an existing, complete PMO capability and therefore is the “big brother” of the standard PMO. Its focus is on integrating busi- ness interests and objectives into the project management environment. This implies introducing common practices to be applied to both project management processes and business processes. To use a term familiar to many professional project manag- ers, the advanced PMO helps create a “projectized” business environment.

Thus, by definition, the advanced PMO cannot be new. Rather, standard PMO functionality must be fully established before an advanced PMO capability can be implemented. Of course, this should not limit PMO designers and developers from incorporating advanced PMO considerations in their PMO implementation plans. Establishing the functionality and capability of the advanced PMO can be the next phase in plans for PMO fulfillment within the relevant organization. It is antici- pated that this stage in the PMO competency continuum can be achieved within 1 to 2 years following establishment of the standard PMO capability.

The stage 4 PMO normally has increased staffing and greater potential for direct alignment of resources. In particular, the PMO staff is enhanced to include the professional and administrative resources needed to develop, implement, and manage expanded processes, programs, and functionality. The PMO director will have expanded authority to address business interests in the project management environment. Assigned PMO resources may be aligned with a few key functional activities within the PMO that provide the means to integrate business and project management practices.

The advanced PMO performs comprehensive, centralized project management oversight, control, and support activities, together with expanded functionality that represents a mature and business-oriented project management organization. These activities include the following:

Introduction  ◾  xxix

◾ Appearing more and more like a separate business unit. If a distinct PMO budget has not already been established at an earlier PMO stage, the advanced PMO normally prepares and manages its own budget as a means of pursuing development and implementation of advanced project management practices and business integration activities.

◾ Collaborating with business units within the relevant organization and par- ticipating in the development or adaptation of processes and practices that are common to both the business environment and the project management environment.

◾ Providing distinct expertise in state-of-the-art project management processes and practices. Senior staff members are assigned full time and represent highly skilled and knowledgeable professionals who apply business acumen and advanced business and project management concepts to solutions imple- mented in the project management environment. These individuals help im - plement such functionality as mentoring services, project audits, and project recovery services. They monitor and manage project results in terms of busi- ness performance. The advanced PMO staff also can include business analysts and specialists from diverse professional disciplines, such as legal, contract and procurement management, customer service, and so forth, as needed full time or part time to achieve PMO functionality.

The advanced PMO will revisit the 20 PMO functions to introduce expanded capacity and programs to manage activities in the project management environ- ment. Because it has a focus on integrating business interests, the advanced PMO also ensures that PMO functions are also integrated for efficient and effective busi- ness support.

Stage 5: The Center of Excellence The center of excellence is usually designated as a separate and distinct business unit within the relevant organization, and it may even have responsibility for enterprise- wide project management operations. Although lower-stage PMOs may be assigned similar responsibilities, it is most distinct at this highest PMO level. Even so, lower- stage PMOs may have a business alignment or reporting affiliation with the center of excellence. Notwithstanding, the PMO functionality prescribed for the center of excellence has a focus on strategic business interests across the relevant organization or enterprise.

Normally, there is an executive in charge of the center of excellence, and that individual should either report to or have direct access to the chief executive officer or any other top executive in the relevant organization. To that end, the center of excellence can be established within the time frame it takes an organization to establish a new business unit, which generally takes from 1 to 2 years to create a viable presence.

xxx  ◾  Introduction

Although it appears at the top of the PMO competency continuum, the center of excellence is a unique project management entity. The center of excellence does not nec- essarily perform all of the prescribed lower-level PMO functionality, but it could. There are two perspectives on how a center of excellence can be established. First, it could be created as a result of the growth and expansion of a lower-stage PMO, which would normally be the case in a small- to medium-sized organization. Conversely, it could be established independent of any existing PMOs, with the objective of providing strategic business guidance and direction to those subordinate PMOs. This would likely be the case in a large, global organization where the center of excellence provides some aspect of oversight, control, and support to PMOs serving regional business interests.

Consequently, the center of excellence assumes a strategic alignment role in the relevant organization and guides the project management environment in its continuous-improvement efforts. These activities include the following:

◾ Providing direction and influence for enterprise project management opera- tions. It also may oversee subordinate PMO functionality where the relevant organization has constructed other PMO operations relative to its interna- tional, national, or other expanded geographical business focus.

◾ Building both project management environment and project stakeholder awareness, representing project management and business interests across business units, and managing customer relationships, as well as vendor and partner relationships.

◾ Sponsoring and conducting studies and evaluations of project management functionality and business effectiveness, with particular focus on its own operations or those of affiliated PMOs.

◾ Representing the business interests of the relevant organization in the project management environment, and vice versa.

The center of excellence should review the 20 PMO functions for strategic busi- ness implications, together with how they can be adapted, adjusted, or redesigned for optimized use, including application by other subordinate PMOs within the relevant organization.

the PMo Functions The Complete Project Management Office Handbook presents 20 function models for practical application of oversight, control, and support solutions in the proj- ect management environment. These functions have a combined influence on the business environment and on the project management environment in the relevant organization. In addition, there are interrelationships among most of the PMO functions: Some functional processes or procedures overlap; some cross-function references will be apparent as each function is examined.

Introduction  ◾  xxxi

The 20 PMO functions are grouped within the following five function categories.

◾ Practice management: Provides a common approach and frame of reference for conducting project management activities within an organization. This PMO function area establishes project management processes and practices; intro- duces associated project management tools; specifies project performance standards and metrics; and creates a collaborative project management envi- ronment that guides project information management and includes access to project archives and a reference library. It concentrates on developing an effective organizational project management capability at the project level.

◾ Infrastructure management: Facilitates establishing a professional project management environment. This PMO function area examines the current state of project management; collaborates plans for the future state; and introduces the policies and oversight mechanisms needed to achieve orga- nizational competency, capability, and maturity goals. It helps to define the project structure and stakeholder involvement necessary to support success- ful project performance, and it provides for administration of facilities and equipment needed to accomplish project objectives.

◾ Resource integration: Manages the competency, availability, and performance of project resources. This PMO function area enables the PMO to collaborate with resource managers to acquire, assign, and manage project managers and project team members; allows the PMO to administer training in the project management environment; and enables the PMO to shape the career progres- sion of the project manager and support aspects of project team development.

◾ Technical support: Provides project management advice, counsel, and support to project managers and project teams. This PMO function area leverages the skill, knowledge, and experience of available project management experts to provide mentoring in the project management environment; provides a range of project planning, facilitation, and support activities; plans and conducts routine and special project audits and project management reviews; and pro- vides appropriate project recovery support, as needed.

◾ Business alignment: Introduces the organization’s business perspective into the project management environment. This PMO function area oversees project portfolio management; facilitates executive involvement in project manage- ment to include overseeing project management contributions to business performance; and manages customer and vendor/contractor relationships, facilitating their roles as project stakeholders.

These PMO function areas are, in turn, further divided into 20 specific PMO functions prescribed for comprehensive and complete coverage of PMO responsi- bilities in the relevant organization. Each of the 20 chapters of The Complete Project Management Office Handbook presents a comprehensive description of one of these PMO functions. Table 0.1 provides a snapshot of the diverse activities of each function.

xxxii  ◾  Introduction ta

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Introduction  ◾  xxxiii

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xxxiv  ◾  Introduction

Concepts and Content overview The prescribed PMO functions and associated activities are presented for due examination and consideration by individuals and organizations looking to estab- lish a PMO capability that will enhance project performance, increase project management capability and maturity, and integrate business interests and objec- tives. The prescribed functions provide insight and guidance regarding the type of PMO functionality that can be pursued and suggest how they can be modeled or constructed. They suggest or prescribe possibilities, leaving it up to the indi- viduals responsible for implementing PMO functions to deliberate and decide how to implement these model concepts in their business environment. Undoubtedly, adaptations and adjustments of the PMO function models will be the rule rather than the exception.

Similarly, it is unlikely that any individual PMO will use all of the functions or activities proffered here. There are too many unique business environments and organizational circumstances to presume that they would all fit nicely in every loca- tion and every business environment. Instead, the PMO can use the recommended function models as guidance, implementing only the particular PMO functions essential to its project management environment.

It should also be noted that the PMO function models are not particularly project management models. Whereas each PMO function model has significant relevance in the project management environment, these models represent what the PMO does, not what the project manager does. At best, the embedded prescrip- tions for the project office are activities performed by project managers when they conduct oversight as a stage 1 PMO. That considered, readers should nevertheless gain tremendous insight into what project managers should do through examina- tion of the content prescribed in each chapter for PMO use.

Throughout this handbook is the underlying premise that the PMO is a “busi- ness integration” activity. To that end, most PMO function models present concepts that not only approach, but also sometimes include, traditional business functions. It is never intended that the PMO replace organizational business functionality or functional departments. Rather, the PMO has responsibility for working with them to facilitate or adapt business functionality for use in the project manage- ment environment. The PMO function model may state that the PMO “should” or “will” do something, but that is only in the context of the prescriptive nature of this work. It is considerably more important that the PMO identify where in the relevant organization such functionality may already exist and then develop collab- orative means to have it be represented in and supportive of activities in the project management environment. The PMO should facilitate the positive influence and integration of business functionality in the project management environment. The applicable PMO function model can, in turn, be used to aid in introducing such business integration.

Introduction  ◾  xxxv

Likewise, when a PMO function model prescribes an action or activity for the PMO to perform, it should fulfill those efforts to the extent permitted by existing PMO com- petency and maturity, current business capability, and acceptance within the overriding organizational culture. The PMO function models enumerate what is needed in the project management environment to effectively conduct project management oversight, control, or support. Smaller PMOs, usually with limited staff and authority, certainly cannot begin to address the full scope of activities recommended for each PMO func- tion model. Some larger PMOs may not be chartered to pursue certain functionality. In those cases, the PMO should adopt as much or as little of the model prescription as needed. When a PMO inherently is not able to fully implement a PMO function, it can work and maneuver within the business environment to facilitate implementation of PMO functional interests by a better-suited business unit or other functional depart- ment. In some cases, the PMO will discover that proposed functionality already exists in the relevant organization. It then becomes the PMO’s responsibility to introduce it into the project management environment, to the extent possible, to align with widely accepted, professional project management practices and precepts.

Given these underlying concepts, each of the 20 subsequent chapters delineat- ing PMO functions contains the following recurring sections.

◾ Chapter introduction: Presents a brief overview of applicable concepts for the given PMO function, including a specification of what capability the PMO achieves as a result of implementing the function.

◾ Project Environment Interface Concepts: Identifies the impact and general ben- efits to be realized within the project management environment as a result of implementing the particular PMO function.

◾ Business Environment Interface Concepts: Identifies the impact and general benefits to be realized within the business environment as a result of imple- menting the particular PMO function.

◾ [Function Area] Activities across the PMO Continuum: Highlights the pre- scribed PMO activities for implementing the particular PMO function at each of the five progressive PMO competency stages.

◾ [Function Area] Function Model: Provides a detailed and comprehensive discussion of the prescribed activities to be performed in conjunction with implementing the particular PMO functionality. This portion of extensive content within each chapter varies significantly according to the prescribed activities of the particular function model.

◾ Postscript for the Smaller PMO: Provides a brief statement of insight and focus for individuals associated with a more modest PMO function implementa- tion. Following examination of the extensive and comprehensive descriptions that present the activities, concepts, and considerations of each PMO func- tion model, this final section of each chapter suggests the fundamental capa- bilities that the smaller PMO can address.

xxxvi  ◾  Introduction

notes on the third edition of this Handbook The preparation of this third edition of The Complete Project Management Office Handbook included a detailed review of concepts and content, and where appro- priate, revisions have been made to present more current thinking or expanded thoughts regarding the original material. As well, the content of each chapter was examined for readability and how well the concepts were portrayed and conveyed for reader use. To that end, every chapter received extensive attention, and every chapter was revised in some way to improve its value to the reader.

The changes made in this third edition of The Complete Project Management Office Handbook are highlighted by the addition of two new appendices that are distinctly on topic for managers having an interest or mandate for PMO develop- ment in their organizations.

The new Appendix A, “Planning and Implementing a Project Management Office in the Organization,” provides detailed steps and guidance for managing the PMO development process. It considers the unique business needs of the relevant organization, and it prescribes the deliberations and decisions that need to be made along the path taken to design and implement an effective PMO. This appendix provides a valuable tool for managers in organizations who have been challenged to create a PMO oversight, control, and support capability in the project management environment. It also provides valuable insight for managers in organizations that already have a PMO but need to review the basis of PMO operations or enlarge its scope of responsibility.

The new Appendix B, “A Simple Examination of PMO Maturity,” offers a quick assessment of PMO capability and maturity based on the five stages of PMO devel- opment, as shown in the PMO competency continuum presented in this handbook. It provides an examination of PMO maturity indicators as a means to ascertain PMO effectiveness in the organization relative to the 20 PMO functions prescribed in this handbook. Although relatively simple, this assessment provides significant value to managers who seek to discover and understand the strengths and weak- nesses of PMO functionality in their organizations.

If you are examining this handbook as a follow-on interest to your use of an earlier release, you should find a great deal of new information and guidance that were not in previous editions of this publication. If you are looking at this work for the first time, you should know that the functionality prescribed for the various levels of PMO capability in the first release have been retained and are fundamen- tally unchanged. These considerations make this work relevant and valuable for professionals in the project management environment as well as professionals in the business environment.

iPRACtiCe MAnAGeMent

1

Chapter 1

Project Management Methodology

A project management methodology provides a standard, repeatable process to guide project performance from concept to completion. It introduces and applies generally accepted project management techniques and practices that fit within the culture and business needs of the relevant organization. It includes identification of the roles and responsibilities associated with each process step, as well as specifica- tion of the input and output for the prescribed sequence of process steps. In essence, a project management methodology conveys to project managers and project team members what to do and how to do it.

The organization can begin fulfilling methodology needs by first introducing just a series of simple processes for use in the project management environment. This will ensure that the activities of project management that are most essential to the relevant organization are being completed. Then, having this foundation, the organization should aim toward developing a more complete and comprehensive process that specifies activities for the entire project management life cycle. This “complete” methodology should address five general project management func- tions: initiation, planning, executing, controlling, and closing.

A methodology is developed to apply adopted standards and practices to proj- ect management, such as that contained in A Guide to the Project Management Body of Knowledge (PMBOK®).* The specification of standards and practices is what

* A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 4th edition, Project Management Institute, Newtown Square, PA, 2008. PMBOK® is a registered trademark of the Project Management Institute.

2  ◾  The Complete Project Management Office Handbook

differentiates the project management methodology from a technical methodology. The project management methodology is a set of processes that can be applied to all types of projects in the relevant organization. In contrast, a technical methodology applies technical standards and deals primarily with the technical aspects of work associated with projects. In larger organizations, there may be one or more technical methodologies needed to accomplish work in different business units. Conversely, the project management methodology can be the same one used across all business units in the relevant organization. Ideally, the organization’s project management methodology will be constructed to integrate the one or more technical processes for seamless use.

This “project management methodology” function enables the project manage- ment office (PMO) to

◾ Establish the standard approach to project management that is to be used by all project managers within the relevant organization

◾ Introduce project management practices incrementally, beginning with those that have the greatest impact on project and business success

◾ Achieve consensus for implementing a common project management life cycle across the relevant organization’s technical and business areas

◾ Provide for collection of pertinent project data used in individual and aggre- gate analyses of project performance

◾ Identify and incorporate technical and business processes into the project management methodology

The “project management methodology” function requires coordination and collaboration with key stakeholders—predominantly project managers—in the project management environment. It is imperative that any project management methodology grows to be supportive of technical and business efforts, so it is essen- tial to involve project engineers, product managers, and other technical and business specialists, as simple processes are expanded to life cycle processes. Furthermore, because policies for methodology deployment are formulated and communicated to all project participants at the executive level, the development and deployment of a standard project management methodology within the relevant organization distinctly requires executive-level and senior management buy-in and support.

Since issuing the second edition of this PMO handbook, the author has pre- pared and published a separate book.* This methodology provides complete and comprehensive coverage of a four-phase project management life cycle, including 96 tools on an accompanying CD-ROM disk. The methodology presented in this publication provides ready-to-use processes, practices, and tools for project man- agement that are applicable in most industries. That methodology content is con- sistent with the methodology guidance prescribed for PMO functionality in this

* Hill, G.M. (2010). The Complete Project Management Methodology and Toolkit. CRC Press: Boca Raton, FL

Project Management Methodology  ◾  3

chapter. In particular, it provides a viable and customizable alternative to the labori- ous methodology effort required in many organizations.

Project environment interface Concepts A project management methodology should be responsive to the needs of all project stakeholders and guide them through the key activities of project management. An effective project management methodology conveys to all stakeholders “how we manage projects.” It accomplishes this by establishing a common frame of reference for everyone participating or having interest in project performance. To that end, it should support all interactions among business, technical, and project management participants. It also provides an immediate reference for those stakeholders on the periphery of or outside the immediate project involvement, to inform them and set expectations about what will be achieved through prescribed project management activities.

Accordingly, the project management methodology introduces the relevant organization’s philosophy, concepts, standard approach, and common terminol- ogy for project work. This allows cross-functional project managers and project team members to understand and share the same project management experience. Consequently, each project manager does not have to create and convey a tactical approach for each new project and for each new team member. As a result, over time, cross-functional teams become more efficient, more productive, and more successful in producing project deliverables and in accomplishing project objectives.

Business environment interface Concepts Inasmuch as the PMO itself functions as an integrator for the organization, the project management methodology is a central mechanism for project and business management integration. A prominent aspect of this integration is seen when each business unit in the relevant organization adapts and incorporates its technical and business processes to be consistent with the methodology. This is an important concept that requires broad organizational buy-in. Once a methodology is set into place, business units having specific business function or technical area responsibil- ities can no longer practice old behaviors that may misalign with or be counterpro- ductive to the project management methodology. To that end, each business unit should examine the standards and practices prescribed by the project management methodology and use them to help produce both technical and business results.

The project management methodology provides a foundation for overseeing work accomplished across business units, including facilitation of cross-functional or matrix-based resource assignments. A well-conceived, well-collaborated, and properly implemented project management methodology will ensure accomplish- ment of all critical project resource management activities.

4  ◾  The Complete Project Management Office Handbook

Another feature of using a standard project management methodology is that it promotes effective project collaboration and reporting within the relevant orga- nization. A coordinated approach to project management facilitates common data collection and distribution across business units. The result of using such a project management methodology is that project progress and performance information can be compiled and aggregated to facilitate timely business decisions across proj- ects and across the organization.

Project Management Methodology Activities across the PMo Continuum The evolution of the “project management methodology” function along the PMO competency continuum is characterized by

◾ Development and implementation of increasingly more complete and com- prehensive project management processes and practices

◾ Increased integration of technical and business process activities ◾ Broader cross-functional business influence at advanced stages of the con-

tinuum, in association with the broader oversight authority and responsibility for project management prescribed by the methodology

Table 1.1 presents an overview of the range of prescribed PMO project management methodology activities according to each level in the PMO competency continuum.

The project office, as a formal or informal entity, is the fundamental agent of proj- ect management methodology implementation. Traditionally, project oversight has relied on the skill, knowledge, and personal experience that each project manager has brought to bear on the projects they manage. Using the project office, project manag- ers can now share their wisdom by developing practices that can be reused and applied across other similar projects assigned to the project office. Ultimately, these practices will form the foundation of the more structured, repeatable project management pro- cesses contained in a methodology that can be shared across the organization.

Midrange PMO levels of the continuum have the responsibility of developing and deploying a full life cycle project management methodology that best fits the needs and requirements of the relevant organization. The PMO first ensures that a standard, structured, and repeatable process for conducting project management is established within the organization. This can begin with incremental development of only the most critical processes and later be expanded to encompass a more com- plete life cycle as the organization gains additional understanding and benefits from the initial processes. The PMO then expands its influence to develop its methodol- ogy to a comprehensive and robust level with appropriate integration or alignment of technical and business processes, according to the affiliated business units’ needs.

Project Management Methodology  ◾  5

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6  ◾  The Complete Project Management Office Handbook

The center of excellence performs any necessary methodology development, deployment, and review activities to formulate solutions and guide process collabo- ration across business units. As the interface with senior management, the center of excellence recommends and implements policy for development and deployment of the project management methodology.

The fundamental objectives of the PMO’s “project management methodology” function across the PMO continuum are to

◾ Determine and implement project management process and practice solu- tions that align with the relevant organization’s business interests

◾ Support the organization’s technical work performance ◾ Assist project managers and project teams in achieving project objectives

Project Management Methodology Function Model This function model presents considerations for the PMO to develop a standard, cohesive process for conducting project management, to implement that process for use by the widest possible audience in the relevant organization, and to monitor and manage its use and improvement. Figure 1.1 depicts the primary activities of this PMO “project management methodology” function model. Each activity is described in the following subsections.

Establish Basis for Project Management Methodology A frame of reference for the project management methodology is needed to ensure that all methodology development participants, particularly the PMO, have and can communicate a clear understanding regarding the direction being pursued to

Establish Basis for Project Management

Methodology Convene methodology development team Prepare methodology deployment strategy Examine current practices

Develop Methodology

Solution Identify methodology components Design life cycle processes Develop project management practices Introduce methodology platform

Conduct Methodology

Implementation

Manage Methodology

Maturity

Plan methodology implementation Plan project transition Conduct methodology training and implementation

Manage methodology implementation Analyze methodology performance Manage methodology maintenance

Figure 1.1 “Project management methodology” function model.

Project Management Methodology  ◾  7

introduce a standard approach to project management. The basis for introducing a project management methodology can be formulated as described in this section.

Convene Methodology Development Team

The PMO will normally have primary responsibility for overseeing project management methodology development. However, the PMO must ensure that project managers and others having technical or business interests are properly represented in the methodology development effort. Therefore, a methodology development team is often formed to include participants both from inside and outside the project management environment to assist in the design, devel- opment, and implementation of the organization’s new project management methodology.

The best way to ensure effective design, development, and implementation of a project management methodology is to involve “resident experts,” particularly those managers who can contribute one or more of the following competencies:

◾ Extensive personal project management experience in the industry ◾ Knowledge and training in advanced project management practices ◾ Understanding of the relevant organization’s project management environment ◾ Experience in development of processes and practices ◾ Familiarity with project team dynamics ◾ Internal sponsorship (methodology development champion)

These characteristics should be considered when selecting individuals for participa- tion on the methodology development team.

In addition, the PMO may want to ensure effective methodology development by using external expert advisors and project management consultants in the meth- odology development effort. Such external resources have prior experience and can bring cross-industry insights and expertise to expedite the effort and help the methodology development team manage process structure design, practice devel- opment, organizational issue resolution, technical and business process integration, and methodology implementation planning.

The PMO should specify and communicate the type of involvement expected of the methodology development team. It should indicate the extent to which methodology development team members will be responsible for methodology concept development, process design, process construction, practice area design, practice area development, content review and approval, and subsequent methodol- ogy implementation and maintenance. For purposes of this PMO function, these activities collectively represent methodology deployment.

On average, the methodology development team should be able to accomplish its methodology development objectives with a minimum of three to five team mem- bers, to include at least one senior member of the PMO responsible for leading and

8  ◾  The Complete Project Management Office Handbook

collaborating the effort. Fewer people can staff the team, but this recommended team size provides smaller to medium-sized organizations with ample exchange of alterna- tive thoughts and perspectives necessary to deliberate and decide on how it will con- duct project management. Larger, more diverse organizations may require additional team members to represent the views and interests of all involved business units.

If the methodology development team is not in itself responsible for review and approval portions of the effort, additional methodology development team mem- bers can be included as necessary to serve as reviewers of completed design and development work. Reviewers should include senior management in the relevant organization, who provide for final review and approval of the methodology.

Other factors also influence the actual size of the methodology development team and should be considered when convening the team. These include avail- able development time and deadlines for completion, level of expertise of the team leader and team members, depth and coverage of process and practice development, and extent of subsequent implementation within the relevant organization.

The PMO can define and recommend methodology development team participa- tion requirements by preparing a responsibility matrix similar to that used for project planning. An abbreviated responsibility matrix is depicted in Table 1.2. The activities that this matrix indicates represent a project effort. To that end, the project manage- ment methodology development effort should be planned and conducted as a project.

The methodology development team configuration should enable timely con- struction and implementation of a viable project management methodology within the relevant organization. An executive participant may also be identified to per- form final review and approval for methodology design and to support methodol- ogy implementation.

Prepare Methodology Deployment Strategy

The methodology deployment strategy provides a roadmap for methodology design, development, implementation, and maintenance. It contains the current and emerging strategy of the organization and can therefore be revised or updated over time. As approved by senior management, this strategy represents the PMO’s current intended approach to methodology deployment. The strategy can be shared throughout the organization, as necessary, with individuals having responsibility or business interests in the project management methodology deployment effort.

The methodology deployment strategy is composed of the following elements:

◾ Methodology development responsibility statement ◾ Methodology development approach ◾ Methodology platform ◾ Methodology utilization policy ◾ Methodology implementation approach ◾ Methodology maintenance responsibility statement

Project Management Methodology  ◾  9

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10  ◾  The Complete Project Management Office Handbook

The PMO can adapt or expand these strategy elements to meet the needs of the relevant organization. In general, the PMO prepares or facilitates the preparation of the methodology deployment strategy to guide and document how the project management methodology is to be established and used. Each strategy element is described in the following subsections.

Methodology Development Responsibility Statement

The PMO prepares this statement to outline its role and responsibilities, as well as those of any other intended participants, including the methodology development team and any external consultants. It can include the methodology development team responsibility matrix discussed earlier. This statement serves as a charter for the PMO and other participants to proceed with the methodology development effort. Inasmuch as this statement may also specify approved funding and authority to act, a senior manager or executive of the relevant organization should review and sign it. However, this responsibility statement may not be necessary if the PMO charter has already adequately covered PMO responsibilities for project manage- ment methodology development.

Methodology Development Approach

The methodology development approach represents a fundamental plan for how the organization expects to conduct methodology development. It indicates the depth and extent of methodology content development, specifies the scope of methodology com- ponent development, and identifies the general methodology development schedule.

An organization can begin formalizing its approach to project management when it commits to developing a few key processes and practices. For example, it is usually prudent to develop initial processes that address issues in highly visible practice areas. These initial processes should provide some quick benefits that will help the organization resolve those issues and become accustomed to the types of organizational changes that will be encountered when a more complete and com- prehensive project management life cycle methodology is subsequently introduced. Of course, the current development effort may be for full life cycle methodology deployment, and the development approach can address that expanded effort as well.

The following list illustrates several progressive levels of methodology develop- ment that can be prepared by the PMO for insertion in the methodology develop- ment approach:

◾ Develop a single, key project management process (for example, project risk management)

◾ Develop a key process series (for instance, for project selection: customer iden- tification, project definition, business case, and project approval activities)

Project Management Methodology  ◾  11

◾ Link selected technical and business process activities to the key process series ◾ Develop a comprehensive project management life cycle process with fully

integrated technical and business activities

The PMO can prepare a descriptive approach for these or other intermediate steps of its choosing when preparing the methodology development approach. The pri- mary consideration of this strategy element is to identify what end state of meth- odology development will be achieved when methodology development efforts are completed.

Inasmuch as the methodology approach element is not a detailed plan, the gen- eral timelines for methodology development activities should be identified. This could include indicating what is to be accomplished over a period of months or even years, with timelines specified in terms of quarters. However, when more information is known, a detailed methodology development plan can be prepared for each step or phase specified in the approach, and it can be attached to this strat- egy document for easy subsequent reference.

This element of the methodology deployment strategy also defines the PMO’s perspective of the project management methodology and what each methodology component to be developed will contain. The primary methodology components often include

◾ Project management process guide: what to do ◾ Project management practice guide: how to do it ◾ Project management tool kit: the means to do it ◾ Project management glossary: relevant terminology

The PMO should use the methodology development approach to specify which components will be developed, to include those listed above or any other methodol- ogy components that are needed.

Methodology Platform

The methodology platform addresses the means by which those responsible for project management apply the project management methodology to project work. It commonly refers to automated systems that provide access to process steps, prac- tice and technique guidance, and an associated database of project information. For purposes of this PMO function, this strategy element considers how the PMO plans to convey the established methodology process and preferred practices that project managers and project team members will use.

The PMO, with insight and assistance from the methodology development team, as well as guidance and support from the information technology (IT)/ information systems (IS) department at the onset of the effort, should determine the type of platform on which the project management methodology components

12  ◾  The Complete Project Management Office Handbook

will reside. Factors to weigh when selecting the methodology platform include the culture of the relevant organization, project manager familiarity with automated tools, complexity of process and practice guidance, and platform development or acquisition costs. Moreover, the PMO should consider the five fundamental types of project management methodology platforms described below.

Paper-Based Documentation — Print publications are perhaps the easiest means to deploy the organization’s project management methodology. The paper- based documentation platform is composed of one or more published volumes of text containing the desired methodology guidance components. It is distributed to all users and is maintained through printed updates or revisions. Within most organizations, it remains the ideal solution for the initial introduction of project management methodology.

Even in today’s highly automated business environments, many organizations still use a paper-based platform for methodology deployment. Created and imple- mented quickly, its development can generally be accomplished at a lower cost than other means of methodology deployment. Furthermore, this methodology plat- form provides the requisite structure and content needed to guide achievement of project objectives, including the use of standard templates, checklists, and report formats. If not developed internally, paper-based methodologies can be obtained from project management organizations and project management training and consulting firms.

Standard word-processing, spreadsheet, and database software applications are used to create paper-based project management methodology process guides, prac- tice guides, and tool and template components. These standard business software applications, commonly used by project managers and project team members, pro- vide the PMO with a familiar vehicle for disseminating the methodology to users in the project management environment. Methodology use is further enhanced when associated applications and templates reside on a common network for wide user access.

The paper-based documentation method may also be the ideal means to create the methodology structure and content for any subsequent automated platform that is introduced.

Automated Application Conglomeration — This methodology platform is a slight variation of the paper-based documentation platform. While this approach similarly uses standard business software applications, there is now more focus toward computer use and less on the use of paper. By definition, this “conglomera- tion” platform uses a variety of software applications, but they are generally not integrated. At best, these applications are available on a network for common access by users in the project management environment, but they may also be found iso- lated on individual computer systems. The direct use of software applications, even though they are not integrated for dynamic information and data exchange, is what

Project Management Methodology  ◾  13

distinguishes this platform from the paper-based platform. However, it should be noted that methodology content must still be developed, as prescribed in the paper- based platform model. Here it becomes a matter of where that content will reside and how user access will be achieved.

Integrated Project Management Application — This methodology platform introduces a more integrated approach to accessing project management methods and tools. This is done by acquiring one of many high-end, multiuser project man- agement applications, which inherently provides the means to collect project infor- mation and perform a broad range of project management activities in addition to managing methodology content.

The cost of acquiring a high-end, integrated project management system is usu- ally steep—often thousands of dollars in smaller organizations up to tens of thou- sands of dollars or more for deployment in large organizations. Cost is therefore a distinct factor when considering an integrated project management application.

The high-end software applications available in the marketplace do not nec- essarily provide a comprehensive methodology process for project management as part of product delivery. That said, some vendors do recognize the difference between a project’s work breakdown structure (WBS) and a project’s management methodology, and these vendors have incorporated process-management and infor- mation display capability into their products. Therefore, another important factor to consider is the ability to install and manage methodology processes and practices using an integrated application. The PMO must clearly define its methodology content management requirements in conjunction with conducting a search for the “best-fit” application.

Integrated project management applications can also offer other specialized features that facilitate activities prescribed by the methodology—such as associ- ated project team collaboration, project reporting, and scope-change management. Other features may include capability to perform processes associated with risk management, resource management, and document management. The need for such features should also be evaluated during the acquisition process.

Enterprise Business Application — This methodology platform is characterized by the acquisition of a software application package that can be used to manage activities of the project management life cycle, which integrates with the applica- tion’s primary function of business function support—for example, resource man- agement, accounting and finance, and customer relationship management (CRM). It is the broader needs of the business that drive the acquisition of an automated business application. Such an acquisition is normally a higher-level business deci- sion beyond the purview of the PMO. However, inasmuch as the enterprise applica- tion contains features and functions that will assist the project manager and project team in achieving effective oversight of the processes of project management, the PMO should be involved in the acquisition process.

14  ◾  The Complete Project Management Office Handbook

Like the integrated application described above, the enterprise business applica- tion should be examined to ensure that it facilitates the performance of all project management activities required by the relevant organization. In some cases, ven- dors are willing to modify their product’s features and functions to enable desired practices and processes. However, such modifications sometimes can be as expen- sive as constructing a fundamental automated methodology application within the organization. The PMO thus has a strong incentive to closely scrutinize off-the- shelf products to ascertain whether the proposed platform can meet the organiza- tion’s requirements without the need for additional modification.

Automated Methodology Application Construction — The final approach to deployment of project management methodology is to construct the desired auto- mated platform in-house. Using this approach, the PMO can influence the design and development of the application’s features and functions. In-house construction can be accomplished by using internal system-development resources from the IT department or an external system developer. It may also be beneficial to combine the two by using (1) a team of internal developers who already know existing sys- tem nuances and configuration and (2) an experienced external team that helps design and incorporate the desired collection of modern project management pro- cesses and practices.

Often, the internal construction of an automated methodology application relies on a previous paper-based design. In such cases, any paper-based platform of processes or practices that the PMO has already developed and implemented will contribute to the construction of its automated platform.

Methodology Utilization Policy

The introduction of a project management methodology is a business decision that requires overt support of senior management within the relevant organization. The way in which the methodology is promoted, anticipated, and ultimately received for use is a key success factor that senior managers directly influence. A policy state- ment on methodology use is an appropriate means to convey senior management support and endorsement or, better, their mandate for methodology use.

The PMO should prepare a policy statement describing the use of the proposed project management methodology and pass it on for review and approval by senior project managers. The best approach is to fashion the statement using a famil- iar format within the organization—policy, standard operating procedure (SOP), executive directive, and so forth. The means of communicating policy regarding the use of methodology may vary by organization, but the objective is the same: to demonstrate the support of senior management for deployment of the proposed project management methodology. Ideally, the most senior executive in the relevant organization will endorse the policy statement.

Project Management Methodology  ◾  15

The PMO should consider including the following elements in the policy statement:

◾ Business interest in methodology deployment ◾ Benefits to be achieved through methodology deployment ◾ Executive direction for use of the methodology ◾ Statement of executive/senior management support of project manage-

ment methodology use and endorsement of project management as a core competency

The policy statement should clearly and briefly describe the purpose and spon- sorship of the proposed project management methodology. An executive or a rep- resentative of senior management should personally introduce the policy statement as part of the planned rollout activities for the proposed methodology. In fact, the executive should personally introduce the project management methodology and identify, promote, and sustain professional behavior adjustments to support the intended use of the methodology at all levels.

Methodology Implementation Approach

This strategy element is used to outline the activities for methodology implementa- tion in the relevant organization. It allows preliminary requirements for implemen- tation to be identified and examined, and it describes the approach to satisfying those requirements. In particular, it will allow the PMO and other planners to discuss and describe how the following methodology implementation activities will be conducted.

◾ Demonstrate executive and senior management support for methodology deploy- ment: Determine executive and senior management roles for methodology introduction. Identify activities that will ensure that they are positioned to convey their buy-in and support for the new methodology.

◾ Convey news and information about methodology deployment progress: Discuss how you will use existing media or set up a new means for disseminating information about the deployment of a new project management methodol- ogy, its acquisition or development progress, and people involved in the pro- cess. This may also include initial announcements and progress information that is provided to customers and contractors.

◾ Develop and conduct an associated methodology training program: Describe the training that will be required for methodology users. This includes consider- ation for both general project management training to ensure understanding of underlying concepts and techniques and specific methodology training to convey processes and practices that will be required in the organization.

16  ◾  The Complete Project Management Office Handbook

Prepare a preliminary training program and schedule that will satisfy meth- odology implementation requirements.

◾ Plan project transition to the new methodology: Specify how the status of each current and pending project will be examined to determine its candidacy for transition to the new methodology. Some projects, nearing completion, will not transition. Other projects, those midway in progress or yet to start, will transition to the new process and tools. Identify the criteria that will be used to determine which projects will make the transition.

◾ Plan the methodology rollout process (i.e., organizational sequence): Determine how the new methodology will be introduced in the relevant organization. This may include the use of a pilot program for a particular group or busi- ness unit as a means to gain early knowledge of rollout issues that can be applied to later rollout segments. It should identify the sequence or order in which business unit or individual users will be introduced during methodol- ogy implementation.

◾ Plan methodology implementation support capability: In addition to the rollout process described above, determine what support will be provided during methodology implementation. This includes such things as project manage- ment mentoring, a methodology help desk, and implementation feedback collection activities.

As the time for actual methodology implementation nears, the guidance provided by this strategy element can be examined, updated as needed, and incorporated into the detailed methodology implementation plan that is subsequently prepared. For each of the methodology implementation activities, the PMO needs to determine if they will be performed in-house by the methodology development team or other individuals or contracted to a qualified external consultant or vendor/contractor.

Methodology Maintenance Responsibility Statement

A broad group of participants will have accomplished the initial design, develop- ment, and implementation of the methodology. The PMO should deliberate and recommend whether a team of those same individuals (i.e., the methodology devel- opment team) will remain intact to perform ongoing methodology review and maintenance activities or whether that responsibility should be assigned to another team or the PMO staff. In either case, a responsibility statement for project meth- odology maintenance should be prepared to ensure that this determination is made.

Similar to the methodology development responsibility statement, this main- tenance responsibility statement may not be required if PMO responsibilities for project methodology maintenance are already adequately covered in the PMO charter.

The PMO also should determine when specific methodology maintenance activ- ities will be conducted. A number of items may trigger refreshing the methodology,

Project Management Methodology  ◾  17

including changes in project metrics; results of capability or maturity assessments; changes in technology; findings of research; discovery of new approaches through application and human innovation; and developments in technical processes the methodology supports. In the absence of specific triggers, however, the PMO can plan to schedule a project management methodology review at regular intervals, normally every 12 to 18 months for a mature methodology.

Examine Current Practices

The first step in introducing formal project management processes and practices is a PMO’s awareness of the starting point. The PMO should scrutinize the organiza- tion’s current capability in the project management environment as a prerequisite to planning and designing the type, depth, and comprehensiveness of project manage- ment methodology support that is required. An examination of current practices provides the baseline for methodology deployment. It should be assessed per the guidelines established within the PMO’s “assessment” function (Chapter 6). The PMO’s examination of current project management practices is presented relative to the following three activities:

◾ Assess current capability ◾ Analyze assessment findings ◾ Compare best practices

Assess Current Capability

The PMO will gain considerable insight into the current state of project manage- ment capability by assessing the current processes and practices used in the relevant organization.

◾ Assess structure and support: This examination should begin with a general evaluation of primary business units to determine their involvement in using project management processes and practices. The PMO may use an external consultant experienced in assessing project management organization capa- bility or devise its own means to gain perspective relative to the following information.

− Current project management organization structure − Individual project manager and project team alignment within that structure − Level of upper management involvement in project management activities − Nature of project support that functional organizations provide − Extent of participation in project activities across the organization − Need for project information and oversight by functional and senior

managers

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This preliminary look at the project management environment will pro- vide the PMO with sufficient understanding of need to enhance project management awareness and support within the organization. Moreover, it will provide indicators for the design of cross-functional responsibility and involvement in project management as methodology processes and proce- dures are developed.

◾ Assess practices and capability: Next, the PMO should undertake an assessment of current project management practices that project managers and teams use. This is normally accomplished through a survey instrument. However, it is preferable to conduct direct interviews with project managers at vari- ous levels in the organization to examine their personal perspectives, as well as with project teams to gain the “group” perspective on how projects are accomplished. The interview method is preferable because it allows examiners to clarify and understand the information provided by each interviewee at the time of information collection.

The assessment must also examine current processes and practices against an established and complete project management life cycle process. The PMO should ensure that the project life cycle it selects for this assessment contains elements and activities that are aligned with the standards it will ultimately pursue, for example, the Project Management Institute’s (PMI’s) PMBOK. This assessment should examine the following information.

− Identify the project life cycle activities that project managers are performing

− Identify the project life cycle activities that project managers are not performing

− Identify the project management practices that are commonly used across all or most projects

− Identify the project management practices that are unique and used only by one or a few project managers

− Identify the project life cycle activities that involve project team members − Identify the project management life cycle activities that involve business

units and other stakeholders At a minimum, the results of the current process assessment should pro-

vide the PMO with a basic understanding of the extent and type of project management practices currently in use. In a subsequent activity, when these data are further analyzed, they will expose more detailed information about gaps in the organization’s current project management practices versus best or preferred practices.

◾ Assess human perspectives: In conjunction with the above assessment, the PMO also may want to pursue an examination of the human side of project perfor- mance to formulate its understanding of additional methodology deployment needs. In particular, a PMO inquiry should capture the following informa- tion from project managers and project team members.

Project Management Methodology  ◾  19

− Interest and enthusiasm in a structured approach to project management − Resistance and barriers to a structured approach to project management − Personal perspectives on the need for a formal project management process − Personal perspectives on what the use of project management methodol-

ogy entails − Personal perspectives on individual and group training − Current preferences for project management practices (techniques)

The results will provide user input to the methodology design and development effort.

Analyze Assessment Findings

The PMO should conduct an analysis of assessment findings to formulate a view of current capabilities. Again, this can be accomplished internally or with external assistance from project management consultants experienced in such organizational analyses. The analysis—as detailed or as simple as the PMO warrants—should be designed and conducted to provide a reasonable understanding of the relevant orga- nization’s current state of project management performance capability. Five analysis areas are recommended and briefly described below.

◾ Process flow analysis: Based on survey or interview results, the PMO can con- struct the common elements of the project management process, including those unique process elements that are not widely used. This can be achieved by preparing a preliminary process flowchart to describe what is currently being accomplished to manage projects. Although similar to and somewhat based on the project management life cycle used in the earlier process assess- ment, this flowchart will contain only those project management activities currently performed within the relevant organization. As such, this flowchart will indicate the strengths and weaknesses of the current processes relative to the project management standards applied.

◾ Process content analysis: The process flowchart created above can be expanded to include the common input and output to each existing process, as well as to identify who is responsible for completing each process step. This analysis, in particular, will indicate what deliverables are achieved through each pro- cess step and what common results the current project management approach have accomplished.

◾ Project management practice analysis: The preceding examination provided infor- mation about how each project manager approaches project planning, oversight, and control, that is, the processes they use. In this analysis, the PMO can iden- tify which practices are common throughout the organization and which are unique to individuals or business units. This analysis will help contrast current practices with best or preferred practices in the organization and in industry.

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◾ Project management tools analysis: The assessment should have collected infor- mation regarding how project managers and their teams accomplish the pro- cesses and practices identified in the current project management approach. This step identifies the tools used to facilitate project management activities and indicates which have common use and which are unique to individuals or business units. Tools, which are discussed in greater detail in the PMO function “project management tools” (Chapter 2), include automated soft- ware applications, as well as forms, checklists, and templates that assist in performing project management activities.

◾ Project management practice support analysis: This analysis determines the extent to which project managers, business unit managers, and senior man- agers are involved in and support a formal, structured approach to project management. At a minimum, the assessment results should provide prelimi- nary indications of the “culture” in which methodology deployment will be pursued. They also indicate the strengths and weaknesses of support for proj- ect management in functional and technical areas of the business.

Compare Best Practices

This step in examining the current project management practices provides an addi- tional analysis of how well the organization is performing project management in contrast to standards and best practices. Using the previously prepared analyses, the PMO can determine if and how well all essential project management process steps are being performed. This activity enables the organization to prepare a “gap” analysis of current practices against either preferred standards or a set of best prac- tices in project management.

It should be noted that standards are inherently different than best practices. Standards represent a basis for performance: the criteria to be met and the goals to be achieved. Best practices, on the other hand, are a set of activities to be considered and pursued to the extent that the organization understands and values them. As such, best practices are perceptions in the eye of the beholder.

This comparison is particularly valuable when it facilitates the identification of which essential processes and practices are missing from the current approach to project management. The comparison to best practices also enables the PMO to determine where any project management practices are weak or applied in an iso- lated manner by one or a few project managers. This best-practice comparison, per- formed against a set of practices in an industry- or standards-based project life cycle, will provide immediate insight for methodology development or improvement.

Develop Methodology Solution Project management methodology development is not a simple task. Inasmuch as the development steps presented here are intended to be a guide, they are not

Project Management Methodology  ◾  21

necessarily all-inclusive of the project management methodology development effort. This undertaking requires

◾ Patience in constructing detailed process steps ◾ Business acumen in defining processes and practices that provide a functional

fit ◾ Product and service awareness to ensure alignment of technical processes and

interests in project management performance ◾ Advanced project management skills on the part of developers ◾ Strong executive and senior management support for the development (and

subsequent implementation) effort ◾ Time, since an average methodology deployment effort can take from 9 to 12

months or more from concept to completion

The PMO can use the information presented in this section to prepare the essential project management processes and practices that are needed to give struc- ture and repeatability to its project management efforts. Moreover, the acquisi- tion and installation of an accompanying methodology platform is rarely complete without some modification or data transfer requirements. This section can assist PMOs in deliberating and deciding on steps needed to install and implement an application in a manner that will be of benefit to the organization.

Identify Methodology Components

The PMO should examine creating a methodology structure relative to four fun- damental methodology components, which can be developed separately or as an integrated guide to project management. The PMO can examine each prescribed component and determine if and how it will be developed in the organization.

Project Management Process Guide

The methodology process guide specifies all the steps or activities for which the project manager and project team are responsible. It may also prescribe participa- tion and actions for other internal and external project stakeholders. The process guide also specifies the primary input needed to conduct each major process step and the output that results from performing the process step (sometimes called the “project management deliverable”). It usually contains a process flowchart that represents the sequence of project management activities to be performed for every project. In addition, it includes considerations for how the process can be scaled down for smaller projects or expanded for larger, more complex, and longer- duration projects. This process is normally created for use by both experienced and novice project managers. In its fundamental form, the methodology process guide serves as a checklist of what is to be accomplished to ensure effective project

22  ◾  The Complete Project Management Office Handbook

management. Additional information about process guide content is presented in the next subsection on life cycle process design.

Project Management Practice Guide

This methodology component contains relevant guidance regarding how to per- form the preferred elements of project management as presented in the aforemen- tioned process guide. It provides step-by-step guidance for performing project management functions, and it serves as a reference that is made available to project managers, project team members, and anyone else in the project management envi- ronment involved in project planning, oversight, and control. Its content should be designed for use by the primary users (including project managers having various levels of experience) and can contain both basic and advanced practices, as may be required by different users for different classifications of projects. Additional information about practice guide content is presented in a subsequent subsection on project management practice development.

Project Management Tool Kit

This component distinctly facilitates the standardization and repeatability that is desired in an organization-wide project management practice. Methodology tools consist of checklists, forms, and templates applicable to the performance of project management. However, tools also can be developed and implemented in the broader scope of organizational processes. This includes cultivating cross- functional tools and techniques that are applicable to project management as well as tools that support associated technical processes and business interests. It may also include guidance for using automated applications as tools for project man- agement. A more detailed discussion of the types of automated tools that can be used to facilitate project management is found in Chapter 2, “Project Management Tools.”

Project Management Glossary

This methodology component provides a reference to standard and common ter- minology used in the project management environment. It ensures that all project stakeholders and participants understand the language of project management. As much as the glossary facilitates discussions and information exchange, it also reduces occasions for miscommunication. Glossary development proceeds out of the growth of other project management methodology components. It should there- fore be expanded as each new methodology component contributes to its content.

The content of the methodology glossary is merely a listing of terms defined for use in the relevant organization. The PMO may want to consider any existing internal documentation of terminology for such inclusion and use. Alternatively, it

Project Management Methodology  ◾  23

may want to provide this component by acquiring a published document contain- ing the requisite terms.

Design Life Cycle Processes

This section of methodology development addresses the “what-to-do” aspect of project management. The life cycle processes provide an overall perspective of the routine project management activities conducted in the relevant organization, and this represents the fundamental content of the project management process guide. Because its guidance will apply to all projects, care must be taken to design an approach applicable to the various types of projects to be encountered. Moreover, there will likely be the need to integrate technical and business processes. If any one technical process is prevalent in the organization, there should be little difficulty in achieving that alignment. However, if the methodology process is intended for wider use across several business areas, the process design may have to accommo- date alignment and integration of multiple technical processes, as well as possible variations in business processes across business units. That said, the focus of this design effort is to ensure that all project management processes of value to the orga- nization are appropriately included in the methodology.

For the purposes of illustration and discussion, the following four phases of a project management life cycle will be considered:

◾ Project initiation ◾ Solution planning ◾ Solution implementation ◾ Project closure

These distinct but related phases ensure the performance of all essential project management activities and tasks. Figure 1.2 depicts the process flow for the four phases of this project management life cycle.

1.0 Project initiation

phase

2.0 Solution planning

phase

3.0 Solution implementation

phase 4.0

Project closure phase

Figure 1.2 Four-phased generic project life cycle.

24  ◾  The Complete Project Management Office Handbook

This life cycle process model can fulfill the project management guidance needs of most organizations. However, in many industries and technical disciplines, there are definitely conditions that warrant examination of a more comprehensive project management life cycle. In some cases, the project management life cycle may con- tain five, six, or more phases of project management activity.

Without doubt, the PMO should consider the nature of its business when delib- erating and defining the phases of the project management life cycle to be devel- oped. The following indicators might suggest the need for a more complex set of life cycle phases:

◾ Projects are related to product development and necessitate separate phases for design and development oversight.

◾ The normal project customer base is a combination of both internal and external (commercial) customers, requiring different approaches to manage internal agreements versus external proposals and contracts.

◾ The business processes of project selection (including product or service sales), CRM, and the like are not fully within the purview of the PMO or the proj- ect manager.

◾ The relevant organization performs different phases of projects in geographi- cally detached locations—perhaps worldwide—thus raising the need for “handoff ” phases.

◾ The organization has considerable distribution of cross-functional work that is best separated by distinct project management phases.

◾ Senior management is involved and has specified project-review points for making project-continuation decisions that are translated into project phases.

Methodology process guide development is usually performed in association with the introduction of a complete project management life cycle. However, the PMO can begin its effort with process development for specific project life cycle phases or for identified critical process series. If methodology deployment is a new pursuit for the PMO, it may want to begin with a more fundamental process design that can be expanded at a later time.

As the PMO designs the life cycle processes to be used in the relevant organi- zation, the following is the suggested content for each process element, as can be presented in the methodology process guide:

◾ Process flowchart illustrating each phase, activity, and task element, and their interrelationships

◾ Process description for each phase, activity, task, subtask, and so forth ◾ Process input and output (project management deliverable) for each process

element ◾ Process responsibility, assigned to the individual(s) responsible for completing

the process element

Project Management Methodology  ◾  25

◾ Process scalability, describing how the process element should be reduced or expanded according to project size, value, duration, and complexity

The PMO should determine whether any other information elements would enhance the process presentation or benefit users of the methodology. These can be included at the discretion of the PMO and the methodology development team.

When using the four-phased project management life cycle model, the process content described in the following subsections is recommended. The PMO and methodology development team should interpret these prescribed process elements for best fit within the relevant organization. Moreover, the methodology designers should consider these recommendations as an initial and fundamental approach to methodology development. More advanced content should be pursued as organiza- tional maturity in project management advances.

Project Initiation Phase

The first phase of project management deals with identifying, examining, and qual- ifying project and business opportunities and conducting project selection actions to determine what projects will be performed. The following activities should be considered for inclusion in the project initiation phase.

◾ Customer identification and qualification: Examines each customer’s business needs and interests and customer intent and capability to conduct the project.

◾ Opportunity identification and qualification: Examines each project opportu- nity to ensure consistency with corporate objectives and business capability.

◾ Project definition preparation: Provides a high-level description of the project in a single document, to include project objectives and scope statement, pre- liminary project deliverables list, project assumptions and constraints, general resource requirements, and general schedule at the project phase level; this is often used in conjunction with financial data and business case development so that a go/no-go decision can be made.

◾ Staffing requirements examination: Provides a preliminary examination of resource availability and internal staffing actions that are needed based on a review of general resource requirements.

◾ Vendor/contractor requirements examination: Provides a preliminary look at vendor/contractor options and acquisition actions that are needed based on a review of general resource requirements.

◾ Business case preparation: Compiles and analyzes all pertinent business infor- mation about the project opportunity and examines associated project and business risks in order to facilitate a project selection decision.

◾ Project selection: An examination of the relative costs and benefits of each project opportunity, usually conducted against established project selection criteria—this may be an extension of the business case preparation effort that

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culminates in a recommendation that is reviewed and a project selection deci- sion that is made.

◾ Project charter preparation: Represents the document issued by the project executive or project sponsor to name and assign a project manager (at the required qualification level for the project); specify the role, responsibility, and authority of the project manager; demonstrate upper management sup- port; and solicit the cooperation and support of other business units and stakeholders involved in the project.

◾ Formal approval to proceed: Provides for management’s review of preliminary project documents, conveys management approval to proceed with the proj- ect effort, and specifically authorizes funding so that project planning can begin. In some instances, this approval and funding authorization may be included in the project charter document.

Solution Planning Phase

This phase of project management is characterized by an examination of customer requirements, the establishment of a customer contract or agreement (including proposal development, as required), the formation of the project team and acquisi- tion of any vendor/contractor resources, and the development of the WBS and project work plan and any other project support plans to be used during project implementation. The following activities should be considered for inclusion in the solution planning phase.

◾ Customer requirements review: Examines customer requirements as a basis for developing the project’s technical solution or technical approach to be pursued and finalizes the list of project deliverables based on the solution developed.

◾ Project team formation: Provides for a detailed review of staffing requirements, preparation of a resource responsibility matrix, and development of a project staff management plan that facilitates staff acquisition and assignment to the project.

◾ Vendor/contractor acquisition: Provides for the identification of vendors and contractors needed to perform project work and specifies development of a vendor management plan to guide vendor/contractor acquisition and management.

◾ Customer contract/agreement preparation: Defines the series of steps for con- ducting preliminary customer coordination, preparing and submitting a customer proposal (as required), negotiating terms and conditions, and estab- lishing a customer contract or agreement to conduct the project. It will be reiterated that this process needs to be accomplished for both internal and external customers.

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◾ WBS preparation: Provides a foundation for the project planning effort and the project risk assessment by showing a decomposition of project activities and tasks.

◾ Project work plan preparation: Provides a comprehensive oversight plan that is represented by the project’s WBS with relevant project cost, schedule, and resource utilization information incorporated for each work package in the WBS. The project work plan subsequently serves as the basis for monitor- ing, tracking, and controlling project performance during implementation. It also guides the oversight of technical and business activities, as they may be included in the WBS.

◾ Project risk assessment: Guides the project team in reviewing the project work plan (and any other project plan elements) to determine the probability and impact of potential adverse events on project management performance and project success, and normally includes the preparation of a project risk management plan.

◾ Project plan preparation: Facilitates the project team in developing additional primary and support plans that are prescribed or otherwise needed for the project; the project team’s planning efforts may include developing the fol- lowing frequently used planning documents.

− Risk management plan − Quality and acceptance plan − Communications plan − Change control plan − Staff management plan − Vendor management plan − Management oversight plan

The project management effort may also include preparing technical or business plans and related documents. You can review a comprehensive list of primary and support plans and their development and use in Chapter 14, “Planning Support.”

Solution Implementation Phase

The project management solution implementation phase (sometimes called the execution phase) involves performing the project oversight and control needed to achieve project objectives. The following activities should be considered for inclu- sion in the solution implementation phase.

◾ Project tracking and control: Provides for monitoring and managing project schedule, cost, and resource utilization; guides the project manager in tak- ing corrective actions to minimize cost, schedule, and performance variance when preestablished variance thresholds are exceeded; and includes the ongo- ing oversight, management, and reporting of project risk, quality, and change control conditions and actions.

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◾ Customer interface management: Provides guidance for the project manager and project team to perform activities that deal with the customer on a day- to-day or recurring basis: preparing and submitting customer reports, manag- ing customer expectations, and keeping the customer involved and informed concerning project decisions and progress.

◾ Staff management: Provides guidance for the project manager (and any des- ignated project team leaders) to oversee and manage project team member assignments, meeting participation, status reporting, and task performance, to include the preparation of performance evaluations and collaboration with any involved resource managers.

◾ Vendor/contractor management: Enables the project manager and project team to oversee and manage vendor/contractor reporting and task performance on a day-to-day basis and to manage the associated vendor/contractor contract or agreement, including invoicing and payment oversight activities.

◾ Project communications management: Fulfills actions for keeping project team members, customers, vendors/contractors, and upper management informed about project plans and project progress and status information that is rel- evant to each; includes overseeing the documentation, distribution, and dis- posal of project plans, progress reports, and lessons learned.

◾ Contract administration: Provides for the project manager or assigned con- tract management specialist to oversee conditions and take any necessary actions to fulfill contractual obligations and to manage the terms and condi- tions of the customer contract or agreement.

Project Closeout Phase

This final project management phase ensures a smooth and distinct wrap-up of project activities, both for the project team and the customer. The following activi- ties should be considered for inclusion in the project closeout phase.

◾ Customer acceptance and closeout: Establishes the process for reviewing con- tract requirements and associated deliverables to ensure fulfillment, provides for closure of customer and project issues to include compilation of lessons learned from the customer, and obtains written customer sign-off and formal acceptance of project deliverables and project closeout; it may also include an examination of customer participation and performance.

◾ Project team closeout: Prescribes the process for compiling project lessons learned from project team members, conducting final team member per- formance reviews, recognizing group and individual accomplishments, and releasing project team members for their next project or other work assignment.

◾ Customer contract closure: Entails overseeing the completion of required cus- tomer contract actions with an emphasis on monitoring and managing the final customer invoice and receipt of payment.

Project Management Methodology  ◾  29

◾ Vendor/contractor contract closure: Provides for oversight of vendor/contractor contract closeout actions and contract fulfillment and monitoring of vendor/ contractor final invoices and payments, and may include compilation of proj- ect lessons learned from vendors.

◾ Project documentation disposition: Specifies how materials developed and maintained during the project (i.e., deliverables and design documents, status and progress reports, meeting minutes, and lessons learned) will be transferred to permanent or semipermanent storage for retrieval and access as historical data that can be used for future project estimating and planning activities.

◾ Operations and maintenance transition: Provides for any final actions (such as training, documentation, and transfer of responsibility) necessary for facili- tating the transfer of processes, equipment, or systems to the customer and ultimate user. In some organizations, this effort is treated as a separate and distinct phase of the project management life cycle, and in others, it is some- times not considered part of the project management life cycle.

Develop Project Management Practices

This section of methodology development addresses the “how-to” aspect of project management. For the PMO and the relevant organization, the project management practice guide is prepared to show the “how-we-do-it” approach to project manage- ment. The practice elements present the techniques used to accomplish the process steps described in the methodology process guide, so each practice element may apply to one or multiple processes across the project management life cycle. If not developed separately, any tools associated with practice elements can be incorpo- rated or otherwise referenced along with those elements in the methodology prac- tice guide. See Chapter 2, “Project Management Tools.”

The methodology practice guide can be constructed to include a combination of current practices and identified “best practices” from industry. For the latter, some users prefer the term “preferred practices” as a means to identify those tech- niques or practices that work well for the relevant organization. To that end, one organization’s “best practices” may not always work, fit, or otherwise translate well into another organization, even in the same industry. Factors such as project man- ager and project team member skill and knowledge, methodology user training, organizational culture, automated tool platforms, IT infrastructure, and project staffing structure will distinctly influence the acceptability, use, and success of “best practices” that are imported from an environment that already has all this in place. Of course, it is the underlying concepts contained in the “best practices” that provide value in the project management processes being developed. As such, the PMO can and should examine industry “best practices,” with consideration for making necessary adaptations—to the practices and to the project management infrastructure—for their use in the relevant organization.

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The PMO should also survey project managers and other project management stakeholders to identify and examine practices and techniques that are currently used in the organization. Some current practices may indicate isolated use but with results for the independent user. Other current practices may have broader use but still need to be identified, perhaps refined, for incorporation into the methodology for access by all users.

The methodology practice guide should contain all practice elements that are essen- tial to accomplishing project management in the relevant organization. Each practice element will describe the activities or set of activities that will be performed by the project manager and other methodology users to accomplish associated process steps.

Suggested content for the methodology practice guide includes the following project management practice elements:

◾ Select and initiate projects ◾ Define a project ◾ Specify project needs and requirements ◾ Establish a project structure ◾ Form and manage a project team ◾ Develop a WBS and project work plan ◾ Estimate project costs ◾ Develop a project schedule ◾ Estimate project resource utilization ◾ Develop project support plans ◾ Manage project stakeholder communications ◾ Manage project reporting ◾ Manage project documentation ◾ Manage change and control scope ◾ Manage project risk ◾ Ensure project quality ◾ Manage project team performance ◾ Track and control project work ◾ Manage project deliverables and acceptance ◾ Manage customer contracts ◾ Manage customer relations ◾ Manage vendors and contractors ◾ Close a project

The PMO should examine this list as a starting point and then develop the practice element titles and content for its own set of preferred practices. In some organizations, selected elements in this list can be combined into a single practice area. In other organizations, where more detailed guidance is desired, the elements can be further decomposed to provide a broader description of the actions and activities to be performed.

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The practice elements in this list provide a fairly comprehensive degree of cov- erage for project management activities across the entire project management life cycle. However, when first introducing a structured approach to project manage- ment with less than a full life cycle methodology, the PMO can consider and select individual elements from this list for initial development and early results.

Introduce Methodology Platform

The methodology deployment strategy discussed earlier will provide guidance for how the project management methodology will be deployed for user access. Of the several methodology platforms considered, the PMO will generally treat project management methodology implementation either as paper based or as an auto- mated application. The fundamental steps for development of these two platforms are described in the following subsections.

Paper-Based Methodology Deployment

This methodology platform compiles methodology components in printed docu- ment format for distribution to users. Depending on the relevant organization’s needs, it can be either a formal or informal publication. However, it is important to ensure that the methodology document is distributed to all relevant project man- agement stakeholders. Project managers and project team members, especially key project team members, and conceivably, some other stakeholders in the business and project management environment should be included. The PMO will need to identify this distribution list.

One excellent means of methodology distribution is through participation in project management methodology training. The PMO might consider this ap - proach to document distribution, where those who complete methodology training receive a copy of the methodology document and thereby carry it back to their workplace for immediate use.

It is important that the PMO be aware of the effort required to produce and dis- tribute even a simple methodology document. This aspect of methodology deploy- ment can affect the timeliness of methodology introduction in the organization. It may even warrant a planning effort that considers the time, cost, and resources required to accomplish the following methodology document production and dis- tribution activities:

◾ Compile and edit all methodology components ◾ Prepare and incorporate any graphics and artwork ◾ Obtain methodology development team/management concurrence on final

copy ◾ Identify the number of users and, hence, the number of copies needed ◾ Produce a master methodology document

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◾ Schedule and conduct printing or publication ◾ Prepare any additional methodology training materials ◾ Plan and conduct publication shipment to training or distribution locations

Any other influential factors prevalent in the organization should also be weighed for inclusion in this production and distribution plan. Where practical, the PMO should consider involving a preliminary user group to preview and com- ment on project management methodology content and to establish buy-in for its use.

Automated Methodology Deployment

When selecting an automated methodology platform, some or many of the paper- based deployment steps identified above may still need to be performed. Unless the processes and practices are constructed directly in the application, the process and practice guide material, and perhaps some tool content, will be developed first on paper. Then this methodology content can be electronically transferred or other- wise introduced into the application by the most expedient means available to the organization.

When a new, automated methodology application is developed or acquired, or when it is necessary for an existing one to be modified, such an effort should be treated as a separate project; the time, cost, and requisite resources must be addressed in planning that project. To that end, there are a number of steps to consider when planning and conducting the introduction of an automated meth- odology platform:

◾ Identification of available software applications ◾ Comparison of software application features and functions ◾ Selection of a preferred software application ◾ Software application acquisition ◾ Software application factory customization ◾ Management of application contract and licensing (and any negotiations) ◾ Software application shipment monitoring ◾ Software application installation and testing ◾ Software application general customization (if not done prior to shipment) ◾ Software application screen customization ◾ Software application report customization ◾ Entry for project management methodology process life cycle component ◾ Entry for project management practice component ◾ Project management tool kit preparation or attachment ◾ Project management information and data entry (for each project in transition) ◾ Project resource pool information and data entry ◾ Project customer information and data entry

Project Management Methodology  ◾  33

◾ Project vendor/contractor information and data entry ◾ Identification of and providing access to primary users (project managers and

team members) ◾ Identification of and providing access to secondary users (functional and

senior managers) ◾ Scheduling and conducting application user training (features and functions) ◾ Scheduling and conducting methodology user training (processes and

practices)

This list represents the highlights of what must be considered for implementa- tion of an automated methodology platform. It is important to reiterate that it is not intended that the PMO alone conduct such automated system implementation. In fact, the PMO should turn over primary responsibility for this kind of acquisi- tion to the IT/IS department, which will provide full and qualified attention to this effort. However, the PMO should participate in system acquisition planning and system selection to ensure that the needs of the project management community are achieved. Similarly, the PMO staff may retain primary responsibility for guid- ing or performing application customization and may also be among the first to be trained in automated system use.

Conduct Methodology Implementation Project management methodology implementation should occur only when an approved methodology has been developed or acquired, customized as needed to serve its project management environment, and made ready for access and use. For any organization, project management methodology implementation is a sig- nificant series of activities; for large, multilocation organizations, it is a complex undertaking. Consequently, detailed planning is essential to the success of project management methodology implementation.

The following subsections describe three prominent activities that facilitate project management methodology implementation.

Plan Methodology Implementation

This activity ensures that the relevant organization is prepared for the introduction of a structured, repeatable approach to project management. It involves planning the means by which the project managers and project team members are introduced to the project management methodology, how executive and senior managers sup- port it, and how it is rolled out for use in the project management environment.

Facilitated by the PMO, the project management methodology implementation planning effort can begin with a meeting of key implementation planners. This probably should include the methodology development team, where members are likely to have continued involvement in the implementation effort or at least can

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provide for an appropriate handoff at this juncture. The purpose of this meeting is to decide on what project management implementation actions will be conducted and to prepare plans accordingly.

The following seven suggested actions for project management methodology implementation warrant PMO consideration and associated planning. Adding these or any other elements to the project management methodology implemen- tation plan should include specifying the cost, activity schedule and completion dates, and the resources required to conduct each methodology implementation activity.

Executive Management Support

The involvement and validation of the methodology implementation by top execu- tives and managers cannot be understated. Their demonstrated support is essential to the success of project management methodology implementation. Conversely, the absence, or perceived absence, of executive-level commitment to the established project management methodology will likely cause inadequate and incomplete implementation. The methodology implementation plan, therefore, should specify what actions executives will take and in which activities they will participate to demonstrate support and endorsement of the project management methodology. At a minimum, a key executive should take part in communicating the project management methodology use policy developed in the methodology deployment strategy.

Formation of Methodology Users Group

The PMO should consider and recommend or accomplish formation of a meth- odology users group. Initially, this group will likely play a very critical role in implementing the project management methodology; over the longer term, the user group can help new users to gain familiarity with prescribed processes and practices, and it can serve to provide ongoing feedback to the PMO regarding methodology utilization and effectiveness. The PMO should prescribe user group participation, which may consist of selected project managers or all project man- agement methodology users. In that respect, if a methodology users group fits the culture of the relevant organization, it should be included in the project manage- ment implementation plan.

Formation of Methodology Implementation Team

The methodology implementation team works to facilitate implementation for each project and at each methodology implementation location. The implementation team should include senior project managers and project management mentors who possess familiarity with advanced project management concepts, a complete

Project Management Methodology  ◾  35

understanding of the methodology to be implemented, and a dedication to achiev- ing the methodology implementation objectives. The methodology implementation team members will work side by side with project managers and project team mem- bers as the new methodology is introduced. Methodology implementation team and associated project management mentor activities can encompass

◾ Facilitating project manager and project team first-time use of the project management methodology processes and practices

◾ Clarifying requirements and guidance contained in the methodology ◾ Listening to and compiling user concerns about methodology use for later

analysis, which signifies that users have a voice in subsequent revisions to the methodology or in immediate actions to correct methodology errors or omissions

◾ Observing early methodology performance to evaluate user acceptance and effectiveness of its application on projects and, later, prepare reports of findings

◾ Working in conjunction with the methodology users group to understand and resolve implementation problems and issues

The methodology implementation team may benefit from the addition of exter- nal project management consultants to serve primarily as mentors. This provides independent assessment of the success of project management methodology imple- mentation and initial methodology performance. It is strongly recommended that use of a project management methodology implementation team be included in the implementation plan.

User Assistance for Methodology Implementation

Methodology implementation represents change in the relevant organization. Therefore, users at all levels will have questions and inquiries about the “how, when, where, and why” of impacts created by this change. The PMO can be proactive in arranging for additional methodology implementation user support during this period by planning the following:

◾ Establishment of a telephone help line or help desk to facilitate implementa- tion of project management methodology

◾ Creation of an intranet Web page dedicated to providing information con- cerning the implementation of project management methodology

◾ Use of e-mail, online chat rooms, and other collaboration tools to exchange real-time, critical implementation information

The PMO will need to provide resources to design and implement these support features and possibly to staff them as methodology experts who have the knowledge

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(and maybe some empathy) that new methodology users will seek during the imple- mentation period.

Development of Methodology Feedback Mechanism

This feedback mechanism provides the capability to measure and collect informa- tion from methodology users. In cases where project management methodology implementation is conducted as a “pilot” program, such feedback will support near- term revision of the methodology. Participants in methodology implementation must be aware that their evaluation is required and that timely feedback is needed to improve the methodology before an expanded implementation takes place across an entire organization. Not only is this feedback mechanism critical in the initial methodology implementation, but it can also be used for ongoing adjustment of subsequent methodology implementation activities.

In planning for this mechanism, the PMO should identify the procedure by which user feedback can be provided, including consideration of

◾ Prescribed format and content of a methodology user feedback report ◾ Desired timeliness and frequency of feedback reporting ◾ Specification of feedback report submittal process ◾ Identification of feedback report distribution ◾ Process for review and evaluation of feedback reports ◾ Procedure for replying to users who provide feedback reports

The feedback reporting process must be a bona fide activity that provides two- way communication because it demonstrates serious consideration of the content of each feedback report from users. The methodology implementation plan should convey both the process and the intent of the feedback mechanism to be used.

Development of Methodology Training Plan

The PMO prepares this plan to identify training for users of the new methodol- ogy. All relevant stakeholders in the project management environment should be offered the opportunity to attend. Thus, a complete project management training program would aim to provide the following participants with the level of training indicated.

◾ Project managers: Detailed project management methodology process and practice training and, if an automated platform is introduced, system feature and function training

◾ Project team members: Appropriate project management process and practice training and, if an automated platform is introduced, system feature and function familiarization

Project Management Methodology  ◾  37

◾ Business unit managers: Adequate familiarization with processes and practices and, if an automated platform is introduced, system feature and function training as needed

◾ Senior managers: Familiarization with methodology overview to acquaint managers with the new approach to project management

A new project management methodology is usually introduced through a for- mal training program that is specifically designed to present the technical, man- agement, and business aspects of its content. However, if formal training is not pursued, some type of methodology familiarization program must be conducted for methodology users. The type and proposed dates of project management user training for each user category are presented in this plan.

Methodology Promotion Planning

The PMO should deliberate the desired approach and specify organizational pro- motional programs and upper management endorsement activities that will be used to support project management methodology implementation. In addition, inter- nal and external publicity notices and promotions can be planned to demonstrate the organization’s enthusiasm as it anticipates and conducts implementation of the project management methodology.

Plan Project Transition

Although this activity can be included in the project management methodology implementation plan, it is identified separately because of its importance to the success of methodology implementation. As such, the PMO must provide strong leadership in planning and conducting the transition of individual projects to the newly implemented methodology.

The following five activities are recommended to assist the PMO in conduct- ing a complete and comprehensive project transition planning effort. Because the process of conducting project transition to a new methodology can be very com- plex, the PMO should remove unnecessary transition burdens from users through preparation of a comprehensive project transition plan that facilitates a smooth transition.

Prepare Project Transition Strategy

The PMO, with input and guidance from senior management, should lead the project management methodology implementation team in the development of a general project transition strategy. This strategy provides guidance for determining which projects to transition; which to complete using current processes, practices, and tools; and which to forego from transition. The strategy also should address the

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scope of initial and subsequent implementation activities, that is, from one business unit to several or all business units, organizationally or according to geographical dispersion.

The transition strategy normally includes the following information:

◾ The criteria to be used to classify which projects are candidates for transition to the new project management methodology

◾ The criteria to be used to identify the point of transition in the new method- ology for projects at different junctures in the project management life cycle

◾ The recommended sequence and proposed schedule for project transition, that is, by project type or classification, by business unit, and by geographical location

Review Project Status

Project managers can be led by the PMO in the compilation of relevant informa- tion for each active project to be transitioned to the new methodology. The PMO should obtain this information from current project managers and analyze it as input to project transition decisions. The project information needed includes the items listed below for each project in progress or new project expected to begin dur- ing the methodology implementation period:

◾ Name of project ◾ Project classification information (e.g., project size, estimated total project

value, and degree of project complexity) ◾ Planned project start and finish dates ◾ Actual project start date and any revised finish date ◾ Project location(s) ◾ Name of project manager and number of project team members ◾ List of project customer and key stakeholders (name, position, and

organization) ◾ Where the project is in the project management life cycle ◾ Project manager’s assessment of how well the customer will respond to

changes resulting from use of the new methodology ◾ Project manager’s appraisal of the project team’s acceptance of the new

methodology ◾ Project manager’s analysis of the need and locations for implementation assis-

tance and project management mentor support

The result of this review is the identification of projects that are candidates for transition to the new methodology.

Project Management Methodology  ◾  39

Conduct Project Transition Interviews

The PMO arranges and conducts interviews with each project manager responsible for the projects selected for transition. The interviews are used to

◾ Identify any current project performance issues ◾ Review and examine project classification information with each project

manager ◾ Review relevant project documentation ◾ Identify issues and constraints that will influence the implementation of the

new methodology on the specific project ◾ Identify the appropriate transition time period ◾ Determine project managers’ concerns relative to implementation of the new

methodology ◾ Identify and plan resolutions to transition roadblocks

Perform Transition Assessment and Gap Analysis

The PMO leads a review of all project information obtained during the interviews and meetings with the project managers. Moreover, the PMO, along with the methodology implementation team, assesses each project’s needs for an effective transition to the new methodology. The assessment and analysis should

◾ Evaluate the application of the new methodology to each project ◾ Identify the gaps between current project documentation and documentation

that the new methodology requires ◾ Determine, through gap analysis, the completion requirements of each proj-

ect relative to the new methodology process ◾ Categorize any special program issues or impacts regarding the new meth-

odology implementation that should be considered in planning the business transition

◾ Calculate the impact of transition on project staff workload ◾ Identify organizational stakeholder groups and develop recommendations for

their involvement in the new methodology implementation ◾ Determine the need for additional resources to conduct each project’s transition ◾ Identify special requirements for project management support, training, and

mentoring

Prepare Project Transition Plan

The PMO leads the implementation team in constructing a detailed project transi- tion plan using information obtained in the above activities. The plan presents the

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general transition approach to be used for all projects in the relevant organization and specifies

◾ The transition point in the new methodology life cycle for each project tran- sitioning to the new methodology

◾ Mandatory or optional new methodology documentation to be completed for each project (i.e., which new methodology tools—forms, checklists, tem- plates—will have to be completed)

◾ Additional resources required to facilitate project transition for each project, that is, project data entry, document preparation and transfer work, and so forth

◾ The project transition activity schedule, including training for project man- agers and project teams, dates of transition to the new methodology, and dates of any needed project management support or mentoring

Conduct Methodology Training and Implementation

Planning by the PMO and the methodology implementation team will serve to guide project management methodology implementation activities. Per established plans, the PMO can oversee the following four project management implementa- tion activities.

Conduct Methodology User Training

Deliver the prescribed methodology training or other methodology familiarization programs in accordance with the methodology training plan. As suggested earlier in this PMO function, completion of project management methodology training should warrant individual receipt of methodology documentation or system access for immediate use by training program participants.

Execute the Methodology Implementation Plan

Introduce project implementation team support and accompanying project man- agement mentoring in conjunction with the completion of methodology user train- ing. Provide methodology implementation support as outlined in the methodology implementation plan.

Activate User Feedback Mechanism

Provide instructions to everyone involved in methodology implementation regarding the process and means to provide initial methodology use feedback. Reinforce the importance of this activity, and demonstrate the value of each user’s

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participation. Initiate feedback analysis activities, and provide replies to participat- ing users.

Execute the Project Transition Plan

Monitor, manage, and assist project managers in their efforts to transition each project to the new project management methodology. This is particularly critical for project managers who have responsibility for more than one project transition. Ensure that PMO or methodology implementation team members are available to assist with issues or to arrange for additional resource support.

Manage Methodology Maturity Project management methodology deployment, over time, requires ongoing PMO attention. Regardless of whether initial methodology implementation is limited to a few key processes and practices or presented as a full project management life cycle solution, the PMO must ensure that its use is achieving the desired busi- ness objectives. Moreover, the PMO will also want to examine opportunities for methodology expansion and improvement, based on the identified needs of the users, alignment with business functions, and capability for introducing advanced concepts in the project management environment.

Three activities, described in the following subsections, characterize oversight of the project management methodology as it matures from initial implementation to broad use in the project and business environments.

Evaluate Methodology Implementation

Because the PMO is responsible for overseeing project management methodology deployment, it is adequately positioned to evaluate the effectiveness of the imple- mentation. This guidance for methodology evaluation can be adapted and applied for both initial and any subsequent methodology implementation activities that are undertaken by the PMO.

The PMO should monitor and evaluate several key points during project man- agement methodology implementation:

◾ Readiness for using the project management methodology platform ◾ Conduct and completion of the methodology user training schedule ◾ Achievement of the methodology implementation activity schedule ◾ Accomplishment of project transitions to the new processes, practices, and

tools ◾ Achievement of early methodology performance capability—that is, satisfac-

tory levels of early use of the project management methodology ◾ Acceptance of the methodology by primary and secondary users

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The PMO should track each of these items to identify and correct any difficulties or deficiencies that the methodology implementation team or the new methodology users encounter. To that end, problems or issues arising from this implementation and identi- fied through conscientious evaluation can be reviewed, and resulting lessons learned can be applied to the next stage of project management methodology deployment.

The PMO should develop procedures for conducting the initial methodology implementation evaluation, and include them in the project management method- ology implementation plan.

Analyze Methodology Performance

The PMO should facilitate the ongoing examination of project management meth- odology performance, enabling the PMO to ensure that the organization receives maximum benefits from methodology deployment.

Methodology performance analyses should be conducted at recurring intervals that provide sufficient time to apply PMO corrective actions in response to poor meth- odology performance results. Upon completing the implementation of a life cycle methodology, the PMO may want to consider a quarterly examination for the first year. Then, with the achievement of favorable performance indicators, the PMO may shift to an annual examination of project management methodology performance.

In analyzing the performance of the project management methodology, the PMO should accomplish, at a minimum, the three primary actions described in the following subsections.

Measure Methodology Use

Establish procedures to measure who and how many people in the project manage- ment environment are using the full or partial capabilities of the project management methodology. This analysis should determine whether there are any common indica- tors of use or nonuse or any isolated occurrences of nonuse that need to be addressed. The PMO can prepare methodology utilization trend charts as analysis aids.

It is assumed that a PMO will seek full use of the project management meth- odology in the project management environment, particularly if the methodology provides complete project management life cycle coverage. This analysis element should be designed to identify levels of use by project managers, project team mem- bers, and other project stakeholders, as well as the extent of use across business units in the relevant organization. The PMO can then delve into the causes for any reduced use and apply appropriate actions to rectify the situation.

Evaluate Methodology Effectiveness

This analysis item may present the greatest challenge for the PMO. However, it is essential if the PMO is to determine the benefits realized from the deployment of

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the project management methodology. The evaluation includes identification and analysis of the following example performance indicators:

◾ Project completion rates (on time, on budget) ◾ Project completion rates for individual project managers ◾ Project planning and associated scope-change management impacts ◾ Efficiency of resource utilization and management ◾ Quality of project deliverables and customer acceptance ◾ Level of stakeholder communication and customer satisfaction

Other indicators designed to measure methodology contributions to project and business performance can be added for PMO analysis.

This evaluation warrants development of specific indicators to demonstrate per- formance within the relevant organization. Therefore, the PMO should convene a senior management meeting to establish recommended analysis criteria and solicit input on areas of management interest in developing the procedures for this area of analysis. Because the PMO in all likelihood will forward methodology perfor- mance analysis reports to managers throughout the project management environ- ment, it would behoove the PMO to collaborate with senior managers on their expectations in advance.

Evaluate PMO Effectiveness

The PMO should establish a self-examination mechanism to determine its effec- tiveness at identifying and responding to the results of methodology performance indicators. In particular, the PMO may want to evaluate its effectiveness in the following areas:

◾ Quality of performance analyses conducted ◾ Completeness and usability of performance analysis reports ◾ Adequacy of performance indicators used ◾ Value of the frequency of analyses that the PMO conducts

The aim of this self-examination is to ensure that methodology evaluations being conducted provide reasonable value, not just to the PMO but also to the organization. To that end, the PMO can consider the list above, along with any other indicators of PMO effectiveness that it deems necessary.

Manage Methodology Maintenance

The PMO has responsibility for overseeing the initial and ongoing design and devel- opment of the project management methodology. As part of this effort, this activity recommends that the PMO conduct ongoing “maintenance” of the implemented

44  ◾  The Complete Project Management Office Handbook

project management methodology. Such methodology maintenance usually com- prises the following activities.

◾ Conduct methodology performance evaluations: Conduct these evaluations and analyses at intervals as prescribed in the previous two subsections to ascertain its use, how well it supports the desired capability in the project management environment, and how well it serves the business interests of the organization.

◾ Conduct methodology content reviews: Examine user feedback in conjunction with regular reviews of methodology content to ensure that processes and practices remain consistent with established standards; determine if process (or practice) improvement will enhance project manager performance and project success.

◾ Perform methodology process (and practice) improvement modification: Determine how often and when any updates or revisions to the project man- agement methodology will be pursued, and then plan and conduct meth- odology modification per the change and improvement recommendations received from project managers and project team members, from other stakeholders in the project management environment, and from independent study and research conducted by the PMO.

◾ Review the effectiveness of the methodology platform: Examine how well the selected methodology platform is serving its purpose. If the platform is paper based, determine if the process is mature enough to migrate to an automated application, and if already automated, determine if the platform is adequately serving the needs of the project management environment or if it is time to consider an upgrade or change in the automated application.

◾ Identify opportunities for broader methodology use: Review the efficiencies and success that the deployed methodology has brought to the relevant organiza- tion; determine if there is a broader scope of users in the current business environment who would benefit from providing the methodology for their use, or similarly consider such methodology expansion across the larger busi- ness enterprise, to include other locations, other geographical regions, or per- haps even global venues.

Postscript for the Smaller PMo These postscript notes are included at the end of each chapter to indicate the sim- pler solutions that a smaller PMO might pursue to achieve some semblance of the prescribed functionality, even when there are conditions of reduced resources, inad- equate funding, and limited mandate or support. However, in this first chapter on PMO functions, there is little recourse for the smaller PMO because the topic of this chapter—project management methodology—is a fundamental purpose of the PMO. Therefore, even the smallest PMO will need to focus on many of the project

Project Management Methodology  ◾  45

management methodology development and implementation activities presented in this PMO function model.

Nevertheless, there is a three-step approach that the smaller PMO can follow to ease the possible conditions of limited influence (authority) and staffing.

Establish Simple, Critical Processes for Project Management Identify the standards to be referenced, and initially build simple processes for a few of the more critical project management activities within the relevant organiza- tion. Such processes and associated practice areas that warrant attention include

◾ Defining the project ◾ Preparing the business plan ◾ Preparing the project work plan (by using a WBS with estimates of cost,

schedule, and resource utilization) ◾ Assessing and managing project risks ◾ Managing project quality and customer acceptance ◾ Assigning and managing project resources ◾ Acquiring and managing vendors/contractors ◾ Tracking and controlling project progress ◾ Reporting project status ◾ Conducting project closeout

Processes for these or any other critical activities in the project management environment should be developed and implemented for use across multiple proj- ects—by most if not all of the project managers in the relevant organization.

When success is achieved through implementation of initial processes, the pro- cess development effort then can be expanded for more comprehensive process and practice coverage across the project management life cycle.

Gain Increased Support for Process Expansion The PMOs best intentions can be undermined by a lack of support for process (methodology) implementation by key project management participants. Therefore, it is essential for the PMO to elicit the support of project managers and senior man- agement during this effort.

The smaller PMO can pursue the support of individual project managers in several ways:

◾ Solicit input of project managers in developing practices and techniques that are used to fulfill process steps

◾ Make the initial processes and practices reasonably understandable and easy to use

46  ◾  The Complete Project Management Office Handbook

◾ Incorporate forms, templates, and checklists as tools that accompany process guidance, and solicit project manager input for their development

◾ Give project managers flexibility and leeway in scaling and determining pro- cess use for each project

◾ Introduce and formalize existing methods and procedures that currently work well for individuals and would benefit other project managers when used more widely within the relevant organization

The smaller PMO can pursue senior management buy-in by demonstrating how a standard approach to project management, applied across all projects, provides business value. This means identifying business benefits that can be derived from introducing an effective series of processes or complete methodology, which can include the following:

◾ Improves business operating efficiency when tools and techniques are not being devised or “reinvented” by each project manager for every new project

◾ Enables roll-up (aggregation) of project information to senior managers on a prescribed regular basis for timely reviews that facilitate business decisions

◾ Ensures conformance to customer requirements and achievement of project objectives, providing better predictability for project and associated business performance indicators

◾ Provides for increased capability to achieve planned project schedules and to effectively manage and control project costs

◾ Improves resource planning, acquisition, and management and contributes to more effective team member interactions

◾ Conveys a common understanding of project responsibilities across the organization

These are just a few of the many benefits an effective project management meth- odology can bring to the business environment. The smaller PMO should care- fully examine its project management and business environments to identify those methodology benefits that would be of greatest interest to executives and senior managers in the relevant organization.

Expand and Incorporate Technical and Business Processes The smaller PMO has presumably started with development and implementation of a small series of processes, practices, and tools that are introduced for use by project managers who have been either convinced or coerced in their use. The PMO can now look at areas to expand those processes as a means to provide more complete life cycle coverage of project management in the relevant organization. Along with process expansion, the PMO should also continue its efforts to obtain the broader buy-in of all project managers, as well as executives and senior management. This is

Project Management Methodology  ◾  47

best accomplished by showing them the benefits already achieved by current meth- odology process users. So, even the smaller PMO will have to monitor and analyze methodology performance to some extent, and it can use some of the analyses prescribed earlier in this chapter.

In turn, as the methodology is completed, technical performance activities can be linked to the process. It’s likely that the smaller PMO will initially have just one prominent technical focus area to consider. It’s also likely that the technical staff will already be using some form of technical process in the performance of their work. It will fall on the smaller PMO, then, to find ways in which to consolidate the two methods: Preferably, the technical methods will be integrated into the project management methodology. This linking model will allow other technical areas (of the relevant organization or across the enterprise) to similarly integrate a different set of technical methods to the same standard project management meth- odology, and that provides for consistent methodology use across the various types of technical- based projects within the relevant organization or the enterprise.

Likewise, the smaller PMO should look at business processes that interface with the project management environment. Very often, the same business pro- cesses are used to support projects and project management as are used to conduct routine business. The PMO can examine areas of project management in which such processes intersect and make efforts to coordinate, collaborate, and develop a common business process that can be incorporated into the project management methodology.

49

Chapter 2

Project Management tools

“Tools of the trade” enable individuals in any profession to perform their work more effectively, efficiently, and consistently. The project management profession is like most others in its need for specialized tools. In today’s project management environment, the project management office (PMO) can serve its constituency well by providing support and guidance regarding the selection, implementation, and use of project management tools.

The tools needed in today’s project environment are predominantly automated software applications. However, there are still many paper-based tools, such as activity checklists, data collection templates, process guides, and knowledge-based desk references that also facilitate project management. The introduction and man- agement of project management tools can be accomplished on an as-needed basis by ad hoc teams or individuals or, when aligned as a PMO function, as part of ongoing operations planning within the project management environment.

The “project management tools” function enables the PMO to

◾ Determine the types of tools that are needed and that fit within the project management environment

◾ Plan and manage project management tool selection, implementation, and maintenance

◾ Monitor and manage the consistent use of project management tools ◾ Provide training in the use of project management tools for users at various

levels of need and expertise ◾ Ensure that requirements for tool integration with existing systems and pro-

cesses are achieved

50  ◾  The Complete Project Management Office Handbook

Professional project managers will inherently seek ways to enhance their per- formance, make project work proceed smoothly, evaluate project information, and manage project team activities. Whereas each project manager will choose tools appropriate for the task at hand, project managers with more experience will likely have developed a selection of preferred tools. Thus, the PMO challenge will be in (1) evaluating the tools that individuals are already using and (2) achieving consen- sus among project managers for the selection and use of common project manage- ment tools that will provide a consistent approach within the project management environment. It is essential, then, that the PMO considers the project managers’ insights and recommendations for project management tools. However, it is also incumbent on the PMO to do its own homework so that it can identify and rec- ommend organizational tools to achieve business interests. It should adequately research the availability of tools in the marketplace, while also considering in-house development of tools to satisfy business and project management needs. In addi- tion, the PMO should prepare for its responsibility in overseeing tool utilization and maintenance once the tools are acquired or developed and implemented.

Project environment interface Concepts The key aspect of this PMO function lies in the concept that implementation and utilization of project management tools are centrally controlled activities. Although the PMO considers individual project manager requests and recommendations concerning tools used in the project management environment, it discounts or eliminates those tools that are not compatible with preferred processes and prac- tices or that require extended effort to transfer or combine data types and results across projects for higher-level reviews. The PMO’s “project management tools” function helps to establish standard applications and systems used across all proj- ects, thereby facilitating the communication of more accurate and timely informa- tion about projects and the project management environment. The PMO will need to address the challenge of providing project tools that achieve user acceptance, facilitate intended access and use, and provide added value to the project manage- ment endeavor.

This PMO function requires collaboration with stakeholders in the project management environment to ascertain their perspectives on tool needs and use. Traditionally, discussions about project management tools have focused on man- aging project cost, schedule, and resources—and there is still a prevalent need for those types of tools. Today, however, there is an additional need to consider tools that can implement modern project management concepts, support a project man- ager’s broader business responsibilities, and oversee multiple projects and manage- ment of project portfolios.

The PMO can address the “project management tools” function by identify- ing and managing the essential tools needed to accomplish project management

Project Management Tools  ◾  51

objectives. However, the PMO should also examine a wider variety of tools avail- able to the project environment, including tools from the following categories.

◾ Project life cycle management: Tools facilitating the accomplishment of project management activities

− Project management methodology systems − Project management methodology process organizers − Process step and checklist managers

◾ Project planning and oversight: Tools providing for planning, monitoring, and managing project performance

− Work breakdown structure (WBS) managers − Project schedule management applications − Project cost management applications − Project resource management applications − Task performance management applications − Time sheets and time management applications − Technique-specific applications (e.g., risk management, change management) − Executive dashboards

◾ Project collaboration: Tools enabling the project manager, project team mem- bers, and project stakeholders to communicate and to exchange and review pertinent technical and business information about projects in the organiza- tion, individually and collectively

− Meeting management applications − Report management applications − E-mail systems − Online “chat room” applications − Team collaboration applications − Knowledge management systems − Online technical library systems

◾ Document management: Tools facilitating development and management of project requirements and specifications, project plans, technical guidance, and other relevant project documentation

− Word processor applications − Spreadsheet applications − Database applications − Computer-aided design (CAD) and drawing creation and storage applications − Document management systems − Content management systems

◾ Business systems: Tools enabling the business aspects of project management to be integrated for use by the PMO, project and program managers, and other project stakeholders

− Portfolio management systems − Business case and requirements capture tools

52  ◾  The Complete Project Management Office Handbook

− Contract and agreement management applications − Customer relationship management systems − Vendor, consultant, and supplier (subcontractor) management systems − Equipment acquisition, assignment, and management applications − Proposal management systems − Facility management applications

◾ Project environment support: Tools enabling the PMO or other relevant man- agers in the project environment to examine capability, monitor resource availability and utilization, implement practices, and conduct operational planning and support activities

− Project management capability/maturity assessment applications − Training program management applications − Online training program review and registration systems − Resource information management systems − Business and project metrics management applications

The PMO can examine these categories of project management tools in its ongoing responsibility to evaluate and recommend tools that enhance the relevant organization’s capability in project management, thus increasing the support and likelihood of success for project managers.

Business environment interface Concepts Project management tools are selected with the principal goal of supporting project managers and their teams. However, by its nature, project management, and associ- ated project work, is a critical representation of the organization’s business. Therefore, the project management tools used in the project management environment can affect the creation and exchange of vital business information across business units. In many cases, entities on the business side of the organization will expect that their input to project management tool selection and implementation will be considered as well. A brief review of the types of tools suggested for use in the project management environment, as presented in the previous section, shows how information created, collected, calculated, and stored through the use of project management tools is also a valuable asset to the business functions of the organization.

The following list highlights some cross-functional business users of proj- ect management tools. Of course, the culture of each organization will deter- mine whether the following functional roles are considered project stakeholders. Notwithstanding that label, these functional roles will have interest in the output of project management tools.

◾ Executives: Executive dashboards and portfolio management systems facil- itate senior-level management decisions for project selection, continuation,

Project Management Tools  ◾  53

and termination, as well as decisions concerning overall resource alloca- tion. This includes the receipt and review of associated project status and progress reports, the coordination and approval of project management plans, and resolution of issues and problems. The executive role normally includes the project executive or project sponsor and extends to partici- pants on senior-level control and advisory boards as well as ad hoc business committees.

◾ Resource managers: Project resources are frequently not assigned exclusively to the PMO or to the project manager on a full-time basis. Therefore, man- agement of the project resource matrix is necessary for effective project team formation, ongoing participation management, and oversight of team mem- ber performance. Resource managers, along with the project manager, need access to information about resource utilization, which can be provided by different types of project management tools.

◾ Functional managers: Organizational managers serving in traditional busi- ness areas will find project information sufficiently relevant to their business efforts to warrant their inclusion for access to and use of certain project man- agement tools.

− Business development and sales managers will have an interest in performing project initiation tasks and customer interface activi- ties as may be outlined and managed in the methodology tool. Consequently, they will have at least some interest in monitoring project progress for customer satisfaction, perhaps using the executive dashboard tool.

− Marketing managers will be looking for project and customer informa- tion to develop targeting strategies and to advertise project successes in publications and news releases. They will be seeking access to proj- ect information databases across the spectrum of project management tools.

− Human resource managers in the organization hold ultimate responsibil- ity for ensuring recruitment and retention of qualified project managers and team members to fulfill all project work requirements and contract obligations. These managers will have a definite interest in project man- agement tools that capture and convey information about resource assign- ments, performance results, and future commitments. Alternatively, these project management tools can also be used to support the human resource department’s job of maintaining an appropriate supply of quali- fied project managers.

− Finance and accounting managers, legal advisors, contract and procure- ment managers, and facility and equipment managers play various direct and indirect roles in supporting project management. Managers in these functional areas can gain useful access to pertinent information from a variety of project management tools.

54  ◾  The Complete Project Management Office Handbook

◾ Customers and subcontractors: External parties as well as internal customers who have an interest in project information can access reporting tools from a network or Web-based applications to obtain project status and customized progress reports. Using collaboration tools, this group also can respond to and comment on project status, participate in associated online discussions and meetings, or conduct coordination for change management activities. Moreover, automated invoice and payment systems, as might be found within a comprehensive contract management, vendor management, or cost man- agement system, would be useful to this project stakeholder audience.

The PMO can best serve the relevant organization by including these busi- ness function managers in its deliberations and decisions concerning acquisition or development and use of project management tools.

Project Management tools Activities across the PMo Continuum The progression of the “project management tools” function along the PMO com- petency continuum is characterized by an early capability to implement a standard tool set across projects, followed by increasing introduction and use of enterprise- level business applications.

Table 2.1 presents an overview of the range of prescribed PMO project manage- ment tools activities according to each level in the PMO competency continuum.

The project office is the primary user of the project management tools that have been selected and implemented. In the absence of a higher-level PMO, it may independently acquire and use the tools it needs to conduct project management. However, tool acquisition and implementation decisions are usually made in col- laboration with other project and functional managers.

Midrange PMO levels of the continuum have the responsibility of introducing progressively advanced project management tool sets based on project environment needs. One primary goal is to implement tools that bolster processes and practices that already exist in the project management environment. Otherwise, tool selec- tion represents a deliberate decision to change to the processes and practices that are guided and supported by the new tool. The midrange PMO distinctly performs tool management when recognizing that tool introductions inherently establish a common approach to project management that will be used across all projects and perhaps across multiple business units. As the PMO introduces more advanced tools to integrate the business aspects of project management, that common approach is then extended across the enterprise. This illustrates the importance of ensuring that the preferred processes are in place and that acquired or developed tools support those preferred processes.

Project Management Tools  ◾  55

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56  ◾  The Complete Project Management Office Handbook

The center of excellence continues in its role as a business unit responsible for integrating business performance in the project environment. It monitors project management tool selection and implementation with a concern for enterprise-wide impacts and integration. It also determines the benefits and opportunities for the organization in connecting external users. As a result, it develops tool access rules and procedural guidance to bring customers and vendors into the organization’s real-time project management information system.

The PMO’s “project management tools” function provides project managers and project team members with timely access to pertinent information and guidance in the project management environment. It also accommodates access to project information on a real-time basis per the individual needs of project stakeholders.

Project Management tools Function Model The PMO’s “project management tools” function model captures the process by which the PMO can introduce any tools deemed appropriate for use in the project management environment. The primary activities of the PMO’s “project manage- ment tools” function model are depicted in Figure 2.1. Each activity is described in the following subsections.

Select Project Management Tools The PMO is ideally positioned to lead project management tool selection through its affiliation and interface role with each project manager, project team member, and other stakeholders in the project environment—the end users of project man- agement tools. Inasmuch as tools are selected to facilitate project management, the PMO is wise to consult with these project participants as it considers the following steps in the process of selecting project management tools.

Select Project Management Tools

Implement Project Management Tools

Evaluate Tool Performance

Identify the need for project management tools Examine general types of project management tools Assess specific project management tools Acquire project management tools

Plan tool implementation Plan tool transition Conduct tool use training Conduct tool implementation

Identify and resolve utilization problems Identify and resolve functional problems Assess overall tool effectiveness

Figure 2.1 “Project management tools” function model.

Project Management Tools  ◾  57

Identify the Need for Project Management Tools

Professionals in the project management discipline will likely support the need for project management tools that help to achieve project management objectives and business success. Many will have preferred products and solutions in mind when discussions arise, and thus, individual contributions of knowledge about tool pref- erences can be obtained for consideration. However, it is incumbent upon the PMO to establish tool selection parameters and find common benefits for the relevant organization in its ongoing search for appropriate project management tools. This includes translating individual and collective tool preferences into solutions actu- ally needed within the project management environment.

The PMO can identify the needs for project management tools in the three ways discussed below.

Examine the Current Environment

The PMO can begin identifying project management tool requirements by exam- ining the current project environment for performance results and reporting capability. This examination should identify what tools are currently being used, individually or collectively; their effectiveness in supporting project management; and their responsiveness to project management reporting requirements. Such an examination may be a casual effort or a formally planned activity that includes user surveys and tool inspections. The results of this examination should provide sufficient indications of which tools are present in the project management envi- ronment, how they are being used, and what the user preferences are for each tool.

The PMO should analyze current tool functionality and utilization. This includes a comparison of current tool use to the desired state of tool use across proj- ects and a determination of the level of tool standardization that currently exists within the project management environment.

Examining project management tools currently found within the project manage- ment environment enables the PMO to establish a baseline for tool utilization from which future tool standardization and functional capability enhancements can be planned. In particular, the PMO should review tool utilization results against its goals for implementing best practices to see where gaps exist in the functionality of project management tools. Those gaps that are uncovered represent the need for either tool standardization or expanded tool functionality, warranting selection of new tools.

Evaluate Requests and Recommendations for Tools

Individuals responsible for conducting project management activities should be a pri- mary source for identifying needed tools. Project managers at the forefront of proj- ect activities are likely to be aware of tools and their functionality through ongoing efforts to improve project and personal performance. The PMO should consult these

58  ◾  The Complete Project Management Office Handbook

professionals to identify needs in the workplace and to establish a process for receiv- ing and evaluating requests and recommendations for tool acquisition and use.

The ideal PMO goal is standardization of project management tools across the relevant organization. However, there are always exceptions to the rule. Individual requests or recommendations for project management tools should be considered relative to the implications and benefits of their use within the project management environment. As deemed appropriate by the PMO, some individuals may need to continue using current tools to accomplish their jobs.

The PMO should set up a mechanism to receive requests and recommendations for new project management tools. The PMO can thereby monitor the interests and needs of project managers and other stakeholders within the relevant organization. It can also collect information about project manager tool preferences as a means to maintaining an ongoing compilation of what tools are in the project management environment.

Determine PMO-Prescribed Tools

The PMO should be proactive in its own examination of the need for tools in the project management environment. It can do this on a casual basis or as an event in response to project performance indicators. In essence, the PMO identifies problem areas it believes can be resolved through the acquisition and implementation of project management tools. It then conducts research to find out which tools would best be utilized and makes independent decisions to acquire and implement the tools that best fit the project management environment.

However, even as PMO-prescribed tools are independently identified, some advanced collaboration with project managers and other stakeholders is still war- ranted and should be conducted prior to tool acquisition. To that end, the PMO may want to establish a project management tool evaluation committee comprising participants from the project management environment and across business units, as needed. This committee could review both individual requests and recommen- dations for project management tools as well as PMO-prescribed tools for the users.

Examine General Types of Project Management Tools

The PMO will need to choose from among the various tools that can be developed in-house or that are available for purchase in the marketplace. The following sub- sections provide a brief overview of the general types of project tools that the PMO can consider.

Paper-Based Tools

This type of tool can be created in-house under PMO guidance or purchased as a commercially prepared tool kit. These tools are commonly classified as templates,

Project Management Tools  ◾  59

checklists, and forms. Although referred to as paper based, this type of tool will usually have a basis in an automated software application. Paper-based tools can be created using common word processor applications, spreadsheet applications, and database applications. The manufacturers of commercially prepared project management applications often bundle a variety of such tools together to support their approach to achieving project management objectives. Such tool kits can be used for data collection and reporting over the entire project management life cycle.

Automated Tools

There are a multitude of automated project management tools available in the mar- ketplace, and in some instances, an organization may be interested in designing and developing an automated tool as an in-house endeavor.

The automated tool normally resides on desktop workstations for individual users or on a network for multiple users. For the purposes of this PMO function model, we will examine two types of automated project management tools: the simple automated tool and the integrated automated tool.

In general, the simple automated tool normally resides on the computer desktop to serve one user. The simple automated tool is usually characterized by singular functionality, its own database, and a limited exchange of data outside the applica- tion. This is not to say that simple automated tools cannot share information, but that is usually accomplished by an export function or a nondynamic link. Rather, the simple tool maintains data on local computers solely for the purposes of its primary users.

Conversely, the integrated automated tool normally resides on a network server. It can have multiple purposes and possibly several functions that different users can access. Some users may never see or access all of the functions of the integrated tool. The tool, nevertheless, maintains cross-functional data and enables cross- functional reporting and data access by multiple users. In some cases, the inte- grated tool will retrieve data and information automatically from other automated tools and organizational databases through dynamic links that are constructed at installation. However, even integrated project management tools are limited to the purposes of their designed-in functions. The PMO should therefore also consider use of enterprise-wide management systems. These are integrated automated tools designed for business use, but they could have application in the project manage- ment environment as well.

Web-Based Tools

There are valid arguments and discussions in industry regarding the use of Web- based tools versus network-based tools. Often, it comes down to individual orga- nizational preferences and the information technology (IT) department’s policies and recommendations for use of Web-based tools. The focus of this consideration,

60  ◾  The Complete Project Management Office Handbook

however, is the fact that project management applications are available on the Web. The PMO should at least consider these externally based applications for use in its project management environment based on the relevant organization’s preference for Web-based tools that can be accessed via the Internet, on the expense incurred for their use, and on the reliability of the online application provider.

PDAs and Wireless Tools

With new technological innovations arriving almost daily, the PMO must consider the extent to which they will infiltrate or otherwise impact the project management environment. In particular, the use of mobile phones and personal digital assistants (PDAs) has become as common as the desktop computer, with increases in such device use still expected in the years to come.

Since the first edition of this book, some mobile devices have emerged as tools having business value. Certain mobile phones can now be acquired with standard business applications (albeit reduced functionally) and direct access to the Internet, and even some limited project management tool applications can be acquired and added. Several handheld device manufacturers also have combined the mobile phone and PDA into one unit, so many devices now have wireless connectivity for making mobile telephone calls, for access to the Internet and various e-mail accounts, and for access to databases residing on servers back at the home office or, for that matter, anywhere in the world!

The PMO should determine how it will develop or otherwise acquire project management application tools for handheld use and wireless operations. Of course, this requires close collaboration with the organization’s IT department, with rec- ognition that this could be a significant system upgrade and financial investment for the organization. In many organizations, the introduction of a wireless system will be independently led and managed by the IT department. However, the PMO should maneuver within the organization to ensure that the interests of the project management environment are duly considered.

Assess Specific Project Management Tools

The PMO should position itself as the primary evaluator for new automated appli- cations and other tools that are introduced into the project management envi- ronment. If not in a lead role, the PMO should at least be involved in project management tool assessments. As the need for project management tools emerges, the PMO should be prepared to identify available products and assess their capabil- ity to satisfy requisite tool needs.

The PMO should use a process that enables specific project management tools to be assessed. This process usually begins with a general search to identify and develop a list of those tools that appear to provide the desired features and func- tionality. This preliminary list of tools available in the marketplace is then reviewed

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to determine how closely each listed tool is aligned with current processes and the function to be automated. This results in a “short list” of candidate tools that is sub- jected to rigorous examination, possibly including discussions and demonstrations with the manufacturer or vendor.

In assessing the “short list” of tools, the PMO should examine each tool, indi- vidually and collectively, in the following ways.

◾ Functions and features: Criteria for tool functions and features are developed and specified for each new type of project management tool. Each tool is then examined to determine how well it achieves the criteria for desired func- tionality and preferred features. Per the depth of criteria used, this provides a more or less objective examination of tools, and it produces results that can be used to compare and contrast all tools under consideration.

◾ Implementation requirements: The requirements for tool implementation are identified as an important part of tool examination. This includes determin- ing the level of both the internal effort and the vendor support required for tool installation and implementation. It considers the scope of tool imple- mentation in the relevant organization or in the enterprise and includes a determination of the level of planning, technical skill and knowledge, user training, and oversight that is required to implement the selected product. This examination of tool implementation requirements then becomes a tool selection factor.

◾ Application maintenance: The need for ongoing tool maintenance should be identified as a consideration for tool selection. In the business environment, the IT group will routinely perform application checks, resolve isolated soft- ware problems, and even install new software versions in a way that is not apparent to the user population. Project management software requires the same if not a greater level of attention by the IT group, and this warrants that they be involved in reviewing maintenance requirements for candidate project management tools. As well, for some automated tools, an administra- tor may be required to monitor daily usage and content, and this is also a maintenance factor to consider.

◾ Vendors: A review of the several vendors of tools on the “short list” is con- ducted to ascertain product quality; customer use of the product; vendor history with this product in the marketplace; and the extent of vendor par- ticipation in product installation and implementation, user training, and maintenance. This usually requires the PMO to contact the vendors directly to obtain necessary information, or by extending a solicitation to bid to each vendor. The information received enables a comparison of vendors to be per- formed as a contributing factor to tool selection.

◾ Costs: The cost of project management tools is a tool selection factor in most organizations. Such automated tools can be quite costly, particularly when intended for multiple users. To that end, the PMO should include a review of

62  ◾  The Complete Project Management Office Handbook

the need for project management tools when preparing its activity budget. If other departmental budgets are used, the PMO will have to collaborate with those business units to ensure funding availability. Cost, however, remains an important factor in the make-or-buy decision. If tool acquisition costs are too high for the budget, the PMO may also want to consider in-house develop- ment of the automated project management tool, presuming such technical capability exists in the relevant organization. All in all, the cost of tool devel- opment or purchase and implementation is a distinct factor in tool selection.

◾ Customization: In acquiring a project management tool, the organization, through the PMO, may also contemplate some alternatives to direct tool acquisition. In some cases, vendors will work with their customers to modify or adapt their automated applications for better fit within the intended proj- ect management environment. Of course, this will often incur substantial additional acquisition costs that must be considered. Nevertheless, the ability to customize tools acquired from vendors may be a tool selection factor.

The PMO’s screening of new project management tools will ensure the closest possible fit for the intended purpose of the tool. This is an activity that the PMO staff, or an ad hoc committee managed by or aligned with the PMO, can perform.

Acquire Project Management Tools

After completing the screening of the candidate project management tools on the “short list,” the PMO should be able to make or lead the organization toward a decision on the preferred tool. Weighing all the factors in the assessment process described above should provide sufficient insight into how well the tool will fit within the project management environment and within the relevant organization. The PMO then follows several fairly standard steps to acquire the selected tool.

First, the PMO confirms that tool acquisition (i.e., purchase) is a better alterna- tive than in-house tool development. Information from the tool screening process is evaluated along with cost and other selection factors; the need for tool customiza- tion should also be considered. Finally, a make-or-buy decision is made, with a buy decision representing approval to proceed with tool acquisition. It is important to note that a project management tool should be acquired to support a valued project management/business principle or practice standard and that the tool can be clearly related to supporting project management performance or to eradicating existing efficiency problems.

The next step in the process is the actual purchase of the tool. A low-cost tool may be a matter of routine procurement for the organization. Conversely, a high- cost tool (due either to multiple users or to customization) may require special handling and perhaps additional approvals in the acquisition process. Accordingly, the PMO should consider these factors when planning for the acquisition and then

Project Management Tools  ◾  63

make the purchase. This can be done by direct payment or by submitting a vendor purchase order.

The final step in the acquisition process is tool receipt and installation. If the selected tool is not immediately acquired at the time of purchase, then it is neces- sary for the PMO to monitor order status and subsequent delivery. In managing tool acquisition, the PMO should plan and prepare the organization for tool instal- lation by the vendor, by the internal IT department, or even by individual users in the case of simple automated tools. Tool installation is complete when the PMO verifies that the tool has been properly configured, functions properly, and has been made available to designated users. If this is a major system or application acquisi- tion, installation could take an extended period of time, and that might require the preparation of a detailed tool installation plan to ensure success.

Implement Project Management Tools Installing a project management tool on the desktop computers of a few users will not normally present a major challenge for the PMO. Conversely, a larger num- ber of users or a major system implementation warrants advanced planning and ongoing management on the part of the PMO. In either case, the implementation activities recommended below will ensure the smooth introduction of a new project management tool.

Plan Tool Implementation

Small tool implementations for small user groups are easily planned: simply sched- ule and arrange the implementation with individual users. However, major tool implementation, particularly those affecting cross-business unit, interdepartment, or organization-wide operations, will likely require additional advanced planning. Implementation of a major project management tool usually implies a change in the way projects are managed and the way business is conducted. The PMO is inherently responsible for preparing project management environment users for such major modifications.

The PMO can consider the following planning elements for tool implementation.

◾ Advanced announcements: Give affected staff prior notice that a decision has been made to acquire and implement a new project management tool that will prompt adjustments in current operating processes; define and include these announcement activities in the implementation plan and schedule of events; include vendors and customers in this notification, as appropriate.

◾ Senior management endorsement: Obtain and convey senior management sanction at appropriate points in the implementation; collaborate with senior managers to plan when and how such approval will be made; determine what

64  ◾  The Complete Project Management Office Handbook

types of endorsements will be needed (written policy changes, staff meeting announcements, etc.).

◾ Implementation schedule: Specify the implementation activities and prepare a schedule for their accomplishment. Beginning with tool installation, include time frames for implementation within different business units or at multiple locations; specify the system connectivity needed to provide access at various facilities, and outline the data transfer activities that are required to make the system operational; identify the implementation support that the PMO will provide.

◾ User training: Specify any training required in association with the intro- duction of a new project management tool; include a schedule for training delivery in the implementation plan.

The inclusion of a transition plan is another element of the project management tool implementation plan. However, the transition plan is considered separately below because of its importance in the successful introduction of a new major proj- ect management tool.

Plan Tool Transition

The PMO will want to focus on this element of tool implementation planning because it represents a critical step in making the new project tool operational. Essentially, the transition plan requires the PMO to determine how, when, and what elements of project management data will be transferred to the new tool. If the new tool is an automated methodology system, transition planning could require an extended period of time to identify how each project in the organization will be transitioned to the new system. Any other major tool that requires populat- ing data from all projects presents a similar extended planning process. This effort is further compounded when the new tool is transitioned at multiple geographic locations, possibly on a global basis.

The underlying premise of the transition plan is to ensure that all key partici- pants know how and when they can begin using the new tool and what role and responsibility they have in bringing it to its intended operating capability. The tran- sition plan also will normally specify what project or business data are being trans- ferred; how that transfer will be accomplished; and what data manipulations, if any, must be performed to make the new tool useful for real-time project management.

Conduct Tool User Training

The complexities of using the new tool will determine the need for user training. However, the PMO should normally consider providing training when implementing any new tool and especially when introducing a major new tool. Furthermore, when a customized major tool is introduced, the PMO absolutely should consider training.

Project Management Tools  ◾  65

The PMO can arrange and conduct project management tool training for one or more user levels, depending on the nature of the tool and the intended access of the users. In general, frequent users will receive more detailed training, whereas infre- quent users, such as executives, will have familiarization training focused on convey- ing understanding of tool functionality and any relevant executive access features.

The PMO can identify user levels and arrange for appropriate training pro- grams during tool implementation planning. It is also important to identify any prerequisite knowledge needed before beginning project management tool training. For example, individual understanding of project scheduling concepts is essential before introducing a project management scheduling tool. The relevant organiza- tion should never presume that simply introducing a tool will solve “performance” problems.

Conduct Tool Implementation

The tool implementation plan should address all pertinent implementation activ- ities that the PMO will manage. The implementation plan should facilitate the accomplishment of the following three items.

◾ Data transfer: The transition-plan component of the implementation plan can be used to guide the transfer of data that will populate the new tool for operation within the project management environment.

◾ Operational functionality: User training begins the process of conveying the knowledge that new tool users need. The PMO will want to monitor initial use, individually if possible, to ensure that all users achieve a complete under- standing of tool functionality. The PMO can determine the depth and extent of monitoring and indicate what activities it will perform in the implementa- tion plan. When the desired level of user performance has been reached (as specified in the implementation plan), the PMO can declare that operational functionality has been achieved for the new project management tool.

◾ User feedback: The implementation plan should include provisions for pre- paring and receiving user feedback in conjunction with implementation of the new tool. This activity achieves two objectives. First, it allows users to know that any concerns about the performance of the new tool are noted and will be appropriately addressed. Second, it enables the PMO to collect indi- vidual opinions and group perspectives on the performance of the new tool, thus permitting immediate fixes of any major problems before beginning the evaluation of tool performance.

Evaluate Tool Performance It is a truism that the PMO’s work is never done. The ongoing monitoring and management of project management tool performance is just one part of that work.

66  ◾  The Complete Project Management Office Handbook

A follow-up evaluation of project tool performance should be based on the extent of the business importance of tool deployment. Major business unit and enterprise- wide systems will require frequent performance reviews until the tool becomes reasonably familiar for users and stable in the project management environment. After that, routine, recurring performance checks will be required to ensure that the tool is being used properly to fulfill its intended purpose and to ensure that its functionality is maintained and optimized for best performance within the project management environment.

The PMO should establish its tool evaluation approach to include three areas of attention: utilization, functionality, and overall effectiveness.

Identify and Resolve Utilization Problems

The PMO should conduct tool utilization reviews for the most critical project man- agement tools—those that guide the project management process and those that provide for timely reporting of project performance. This type of review can be a formal survey of users or casual observation of utilization. Its intent is to ascertain whether the tool is being used for its intended purpose within the specified user group.

In particular, the PMO will want to identify why a certain tool, or feature or component of a tool, is not being utilized in a way that is consistent with expecta- tions. Reasons for nonuse may include inadequate or no user training, tool-learning hesitation or misplaced priority of the individual user, lack of senior management endorsement or communication regarding desired tool use, limited perception of personal value or benefit by the user, limited perception of organizational value or benefit by the user, and other explanations that the PMO can discern.

Once low-utilization indicators or trends are identified, the PMO should work with project managers to rectify the situation and bring it in line with organiza- tional expectations and mandates for tool use. The PMO may want to retain a log of the tool utilization problems encountered and the corrective actions taken as a reference for future use.

Identify and Resolve Functional Problems

The functional performance of project management tools can be examined in con- junction with a utilization review. The PMO can accomplish this by conducting random testing of tool features. Alternatively, the PMO can establish a problem log for use on each project and then review the tool problem log, perhaps on a weekly or monthly basis or at the end of each project. The functional problems to be encoun- tered could range from simple system “lockup” to more profound user recognition that the tool does not possess a desired feature or perform a preferred function.

By analyzing the review findings and problem logs, the PMO can identify and isolate tool functional problem indicators and trends. As a natural follow-up,

Project Management Tools  ◾  67

the PMO should attempt to resolve each identified problem. Some issues can be resolved in collaboration with the internal IT group that oversees the application. If recurring problems exist, the PMO may need to contact the project management tool vendor for resolution.

Assess Overall Tool Effectiveness

The final element of the PMO’s tool evaluation is an examination of overall tool effectiveness. In essence, this means determining what the tool has accomplished for the organization or the project management environment. What benefits have been achieved as a result of using this project management tool: increased project success, timelier project decisions, earlier identification and resolution of project problems, and so forth? The tool assessment should also examine the benefits to individual users. Have individual and project team efficiency or effectiveness been increased?

The PMO can use this information to substantiate continued tool use or expanded tool deployment, or as a rationale for pursuing an advanced version of the tool or an alternative replacement tool.

Postscript for the Smaller PMo The smaller PMO will likely not have responsibility for major project management tool acquisitions. However, it could lead the relevant organization in acquiring sim- ple tool solutions for the project management environment. It could also be called upon to be a participant in major tool and system acquisition efforts—at least for those tool or system components implemented for project management support.

The following activities are prescribed to help define tool management respon- sibilities for the smaller PMO.

◾ The smaller PMO should be reasonably aware of which tools are currently available and being used in the project management environment. It can cre- ate a simple listing and description of those tools for further examination as time permits. This list will help to establish the PMO as a knowledgeable source of tool information in the project management environment.

◾ The smaller PMO can use a listing of current tools, in combination with some additional tool research, to contrast what tools are being used with what tools are available in the marketplace. As well, the smaller PMO can gain knowl- edge about tools through collaboration with project managers and project team members to gain their insights about preferences for project manage- ment tools. Further research can be done on “preferred” tools.

◾ The smaller PMO supporting a large project management environment should consider convening ad hoc teams to identify and evaluate major

68  ◾  The Complete Project Management Office Handbook

project management tools and systems for possible implementation in the project management environment. Such teams also can be chartered on an as-needed basis to evaluate the effectiveness of current project management tools.

◾ The smaller PMO can guide and influence project management tool acquisi- tion and implementation in the project management environment or across the enterprise by being the knowledgeable source on project management tools.

◾ The smaller PMO can establish the capability and authority to introduce small or off-the-shelf project management tools as may be routinely needed in the project management environment. In this instance, the PMO can call upon vendors to contribute their expertise in planning and conducting tool implementation, which reduces or eliminates the need for the PMO to use resources for that task.

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Chapter 3

Standards and Metrics

The project management office’s (PMO’s) attention to standards and metrics repre- sents the management of two distinct areas of business interests. They are combined in this function because they provide related guidance in the project management environment. That guidance is largely aligned with the concepts of project manage- ment performance.

In many ways, standards provide a basis for performance, and metrics provide for the measurement of that performance against standards. To that end, project management practices may use metrics to establish the depth and extent of apply- ing the standards selected by the relevant organization.

The “standards and metrics” function helps the PMO to establish a common frame of reference for and among the business, technical, and project management interests within the project management environment. Standards and metrics can be considered and applied across the relevant organization to fulfill the PMO’s responsibilities as a business integrator.

The “standards and metrics” function enables the PMO to

◾ Identify accepted concepts and practices for use within the project manage- ment environment

◾ Establish consistent oversight and control for cost, schedule, and resource utilization

◾ Manage project, technical, and business process performance to desired standards

◾ Achieve compliance with industry standards, regulatory mandates, and busi- ness policies

◾ Conduct benchmarking related to competency, capability, and maturity goals

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Standards used in the project management environment have traditionally focused on project management performance. This, understandably, is a top PMO priority: ensuring that appropriate methodologies and practices are introduced into the project management environment. Today, the PMO’s expanded role as a busi- ness integrator warrants consideration and introduction of standards aligned with the project management environment that also facilitate the achievement of stra- tegic business objectives. Instituting standards that enlarge competitive advantage, demonstrate advanced individual and organizational qualification and certification, or improve business performance is an inherent objective of this PMO function.

Metrics serve a dual purpose. First, they provide guidance—values, thresholds, constraints, scope, duration, maximums and minimums, averages—for project, business, and technical performance. Guidance metrics enable the PMO to set performance requirements and expectations within the project management envi- ronment. Thereafter, metrics measurements will indicate performance results, that is, trends, achievements, discrepancies, variations, and exceptions. Measurement metrics represent information that can be used to establish a common understand- ing of status, condition, and position. This permits project and business decisions to be made in the best interests of the relevant organization. The PMO contributes to this capability by developing and deploying the metrics that are applied to the standards and practices of project management.

Project environment interface Concepts The standards found in the project management environment should provide con- sistency across project and business management interests. The PMO’s centralized role permits it to examine applicable standards and manage their introduction to the project management environment. Moreover, because it serves in a business integration capacity, the PMO can manage metrics associated with project manage- ment as well as those metrics that serve related business interests.

Metrics are established to address a particular business need. This includes such drivers as managing to a new level of required performance, identifying individual and aggregate project performance indicators, and monitoring change within the project management environment. Over time, metrics change as new priorities and conditions are added. For example, when considering project management matu- rity, one set of metrics will be used to guide advancement from level-1 maturity to level-2 maturity; a new set of metrics will be needed to achieve progression from level-2 maturity to level-3 maturity. Consequently, metrics are often valid for a specified period or until a desired condition is achieved. As a result, the PMO will need to monitor and manage changes in metrics used within the project manage- ment environment.

The PMO, in collaboration with its organizational sponsor, will identify the scope of standards and metrics for which it is responsible. Equally important will

Standards and Metrics  ◾  71

be the PMO’s role in coordinating and conducting the implementation of approved standards and the use of metrics within the project management environment. This includes the involvement of project managers, project team members, and other project stakeholders in identifying and applying the project management standards and metrics that will be required in their day-to-day work. In addition, these groups can contribute expertise to assist the PMO in reviewing and adapting externally imposed business, technical, and regulatory standards and metrics for use within the project management environment.

An important aspect of standards and metrics is their application to bench- marking, an activity that provides a snapshot of project and business performance. Benchmarking involves assessing current processes, practices, or capability relative to industry standards or accepted best practices. The PMO will be instrumental in selecting the standards that provide the basis for such an examination. It will also formulate metrics that help both to describe any variation from that basis and to define improvement goals.

Business environment interface Concepts The relevant organization will have an interest in the standards and metrics that the PMO applies. It will collaborate on project management standards and will review and endorse the introduction of cross-functional standards. The relevant organiza- tion will therefore both contribute to and use many of the metrics applied in the project management environment.

Business units will be able to use the metrics defined and captured in the project management environment in conjunction with analyses of business performance, achievement of strategic objectives, and identification of the organization’s com- petitive position in the marketplace. In many cases, the PMO can establish met- rics that are directly applicable and influence business decisions in these and other important business areas.

Today’s professional project managers have a broad range of responsibility that extends into the business environment. In many organizations, they fulfill key mid- dle and senior management roles that direct or guide business affairs. The standards and metrics that they are accustomed to using in the project management environ- ment will also be relevant and influential in the business environment.

Many project managers have financial accountability for their projects; some have business performance responsibility as well. Project management standards help to establish the parameters of their responsibilities, and using project and busi- ness metrics provides indicators regarding how well those responsibilities are being fulfilled. The “standards and metrics” function facilitates performance analyses within the project management environment. Individuals within the project man- agement environment will look to the PMO as a centrally recognized authority to select, implement, and manage the standards and metrics they will use. The

72  ◾  The Complete Project Management Office Handbook

relevant organization will rely on the PMO to incorporate business strategy and interests into project management processes and practices through this “standards and metrics” function.

Standards and Metrics Activities across the PMo Continuum The “standards and metrics” function along the PMO competency continuum is initially characterized by the introduction of standard approaches to project and technical performance management. This capability progresses to the identifica- tion and implementation of more comprehensive standards, as well as a broader use of metrics in the project management environment. At the high end of the continuum, the PMO will influence the use of standards and metrics that interface with the business unit and the organization’s strategic interests.

Table 3.1 presents an overview of the range of prescribed PMO standards and metrics activities according to each level in the PMO competency continuum.

The primary user of standards and metrics established within the relevant orga- nization is the project office. In the absence of a higher-level PMO, it may indepen- dently specify a limited number of project management standards and metrics in collaboration with other affected project managers. The project office will not likely venture into developing and implementing business standards, inasmuch as that is a collaborative, cross-functional effort. However, it will apply business-related stan- dards and metrics when they are integrated into project management and technical processes and practices.

Midrange PMO levels of the continuum have the responsibility of introducing project management and associated technical and business standards and metrics into the project management environment. In particular, these PMOs will focus on selecting or recommending standards for use within the relevant organization. Thereafter, they will conduct benchmarking against those standards to identify a basis from which to plan and measure project, technical, and business perfor- mance improvement. In addition, the midrange PMO will have interest in applying project management capability and maturity model metrics by initially addressing requirements for project and technical performance and then by integrating orga- nizational and business metrics as the PMO function and organizational maturity in project management grows.

The center of excellence performs the “standards and metrics” function with attention to the relevant organization’s broader business and cross-functional interests. It contributes information and experience based on its selection and implementation of standards and metrics used in the project management environ- ment to serve the broader business integration and standardization needs of the organization.

Standards and Metrics  ◾  73

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In many cases, the standards and metrics that this PMO function establishes will have direct implications on how other PMO functions are performed. Thus, the inauguration of standards and metrics in the project management environment should weigh the interrelationships of all PMO functions.

Standards and Metrics Function Model The PMO’s “standards and metrics” function presents the means by which the PMO can introduce the preferred ways of doing business within the project man- agement environment. The primary activities of the PMO’s “standards and metrics” function model are depicted in Figure 3.1. Each activity is described in the follow- ing subsections.

Implement Project Management Standards Project management has advanced as a professional discipline because, to one extent or another, scholars, innovative thinkers, and experienced project managers have formulated, implemented, evaluated, and conveyed to others the concepts and practices that have demonstrated value in the project management environment. This value contributes to achieving individual success in project management and associated organizational business goals. Time-tested methods have evolved into the widely accepted project management precepts that project managers use across industries and around the world. Many of these precepts are implemented with- out change across industries, whereas others are modified and adapted for specific industry use. Over time, new, innovative approaches will continually emerge to provide more complete and comprehensive solutions in the project management environment.

The PMO is responsible for sorting out all of these pending solutions and for selecting those that best fit the needs of the relevant organization. Solutions become standards for the organization only when they are approved and implemented for use in the project management environment. Implementation involves a series of

Implement Project Management Standards

Determine Project Metrics Requirements

Introduce and Use Project Metrics

Examine standards sources Identify applicable standards Introduce preferred standards Conduct benchmarking

Identify process management and improvement metrics Identify project performance metrics Identify business management metrics

Establish measurements plan Compare performance Establish corrective actions

Figure 3.1 “Standards and metrics” function model.

Standards and Metrics  ◾  75

steps that the PMO can use to introduce standards into its project management environment, as described in the following subsections.

Examine Standards Sources

The primary purpose of introducing standards is to improve project, technical, and business performance. The PMO begins this work by examining the various sources of standards that are available for consideration. Ideally, the PMO has suf- ficient staff experience and insight to uncover the relevant sources that need to be addressed. The following five subsections identify a few general sources of standards that the PMO can examine when initiating this effort.

Project Management Practices

The PMO should determine what standards are needed to guide the performance of project management. This includes an examination of prominent project management processes, practices, and tools that can be introduced as standards within the project management environment. Ideally, the project management practice standards that the PMO selects will facilitate development and implementation of a complete project management life cycle methodology. However, standards introduced to assist the orga- nization in developing and implementing component processes that are critical to its project management efforts are normally an excellent investment.

The Project Management Institute, Inc. (PMI), publishes A Guide to the Project Management Body of Knowledge (PMBOK),* a widely accepted and well-known project management standards reference. A small number of other project management asso- ciations also provide project management process and performance guidance. Similarly, some professional organizations have developed industry-specific project management guidance, and academia is a consistent source for new and emerging project manage- ment concepts and considerations. In some cases, business organizations have compiled and implemented best practices in project management from various sources, includ- ing their own experience. However, access to these “standards” is normally limited to participants in business or industry forums or by some other affiliation with the source organization.

Finally, a multitude of commercial vendors can provide structured project man- agement process and procedural guidance in conjunction with the delivery of their products and services. Many of these commercial sources incorporate industry- accepted standards. However, some tend to focus on the specific purpose of their product or service and may not provide complete and comprehensive project man- agement coverage. For that reason, the PMO should weigh its near-term and long- term needs when selecting between consultants or vendors that offer specific-focus

* A Guide to the Project Management Body of Knowledge (PMBOK ® Guide), 4th edition, Project Management Institute, Newtown Square, PA, 2008.

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products and services and those that provide broader guidance and support for the entire project management life cycle.

Project Management Maturity

The PMO should determine what standards are needed to guide its efforts to create a professional project management organization. This responsibility raises the concept of project management maturity and includes an examination of available project man- agement maturity models that can be used within the relevant organization.

The various project management maturity models available today take a some- what common approach that carries the organization through steps of assessment, analysis, and improvement planning. The assessment process usually involves a sample of the organization’s project management population and, at times, other stakeholders within the organization. The PMO should recognize that most viable maturity assessments will delve into the “nooks and crannies” of the project man- agement environment, that is, project and business practices, management support, PMO guidance and support capability, project manager competency, and so forth. This enables the organization to gain an accurate and comprehensive picture of its project management maturity based on the selected standard.

Project management maturity models are also available from several of the profes- sional organizations and commercial vendors alluded to earlier. Some models are more inquisitive and complex and require extended periods of time in their performance. Others are more cursory in scope but can be completed within a short time span. The PMO’s responsibility for introducing project management maturity standards deals with the selection of a preferred model and its associated assessment process. These are used to identify the current maturity level and to construct a strategy or “road map” for advancing the organization’s maturity in project management. Although there is no maturity standard that can boast consensus of its universal application, the concept and use of any viable project management maturity model can nevertheless be mean- ingful for continuous improvement efforts within the relevant organization. The PMO should give serious consideration to deciding what is the appropriate level or combina- tion of maturity level elements for its business needs. Then it can select a project man- agement maturity model that will help achieve the desired capability.

Technical Capability

In many project management environments, the PMO will inherently have respon- sibility for helping to establish the technical standards associated with project work. Usually, PMOs will need to focus only on the core business and the primary tech- nical discipline of the relevant organization, especially when that organization is a homogeneous division or business unit. In that case, the nature of work that the division or business unit performs defines the technical focus. Conversely, PMOs that have cross-functional responsibility or those that serve the entire enterprise

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may have to establish standards for more than one technical discipline. To that end, it is not uncommon for a PMO to begin its work in one technical depart- ment and then expand its scope of authority and responsibility into other business areas as it demonstrates success. It is for this reason that this PMO function model treats technical standards separately. Every PMO must recognize that technical standards should be integrated with the project management process or methodol- ogy to ensure a seamless approach to project management.

Industry-specific professional organizations and associations, including some that have a project management focus, are prevalent sources for technical stan- dards and best practices, as are educational institutions. The Software Engineering Institute’s Capability Maturity Model (SEI CMM) is a prime example of a techni- cal maturity model and provider. Of course, there also are consultants and vendors who work in virtually all industry niches that can provide excellent insight (not to mention some products and services) for industry-specific technical needs. The PMO should collaborate with the relevant organization’s technical professionals, including engineers, scientists, administrators, consultants, and instructors, among others, to help determine the preferred sources of technical standards.

The PMO should ensure that technical standards are properly integrated and that users do not misconstrue them as project management standards. Technical standards, processes, and best practices should guide the project participants in achieving the desired technical solution—the resulting product or service. Project management standards, however, verify that the prescribed steps are performed to manage the project. Although technical and project management standards should be duly integrated to optimize project performance, technical capability is not inherently a project management capability.

Project Management Competency

The PMO should play a major role in determining competency and skill standards for its project managers, project team members, and other relevant project stake- holders. It should work with the human resources department and resource manag- ers to define appropriate project management competency standards.

Whether or not the relevant organization has a formal project management career path has direct bearing on the introduction of competency standards. If a profes- sional career progression program exists within the relevant organization, then distinct involvement of the human resources department is necessary to ensure that related compensation and employment considerations are handled properly and are aligned with the prescribed standards. In the absence of a formal career path, project manage- ment competency standards can be identified relative to a generic list of project manage- ment responsibilities rather than presented in a formal position description.

Once again, professional organizations and associations may be the preva- lent source of standards for project management competency. As always, consul- tants and vendors are readily available to provide assistance in establishing project

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management competency models and standards. Individual competency in project management, per established standards, is usually achieved through design and implementation of a strong project management training program. See Chapter 10, “Training and Education.”

Organizational Certification

Organizational certification represents achieving compliance with standards for performance across the enterprise. While such standards may be industry spe- cific, they also may have cross-industry application. The pursuit of International Standards Organization (ISO) standards is a prime example of an organizational certification. As well, the pursuit of standards associated with government and industry awards, such as the Malcolm Baldrige National Quality Award, can be managed along the lines of organizational certification.

The extent of the PMO’s responsibility within the relevant organization will guide the PMO’s involvement in selecting and managing standards for organiza- tional certification. Most PMOs will not have to manage this type of standards implementation unless they are functioning at an advanced level. It is more likely, however, that the PMO will be called upon to participate in an organization-wide certification effort rather than take a lead role. Nevertheless, the PMO should influ- ence or recommend pursuing organizational standards certification with regard to the interests of the project management environment. To that end, it is important that the PMO understands where project management in various organizational certification programs intersects and how or whether project management capabil- ity is important to the certification effort.

When involved in an examination of organizational certifications, the PMO should focus on those certifications that will provide some business advantage when standards are met. Standards that facilitate added customer value and satisfaction, improved operational effectiveness, or increased revenue are good indicators of such a business advantage.

Sources of organizational certification standards are likely to be prominent in the organization’s base industry, or they may be well recognized by a business segment within the organization. Moreover, the industry certifying body is usually also the developer of the associated standards to be examined. Therefore, any examination of standards is easily accomplished through contact with the certifying organization.

Identify Applicable Standards

After examining the sources of standards available to the project management envi- ronment, the PMO will make or otherwise facilitate or influence decisions about the specific standards that are preferred within the relevant organization. The fol- lowing six subsections describe some of the more common standards that the PMO may consider and select for use within its project management environment.

Standards and Metrics  ◾  79

Project Methods and Procedures

The PMO should facilitate selection of a preferred project management methodol- ogy that provides a consistent and repeatable life cycle process approach to proj- ect management. If developing a comprehensive methodology is premature for the current environment, the PMO should consider beginning with simpler processes for accomplishing its most critical project management activities. This standard should guide all project managers in performing the essential activities of project management that the relevant organization requires. This standard also will serve as a reference to all other stakeholders within the project management environ- ment—project team members, project executives, functional managers, customers, and vendors—who need either to apply or to simply understand the processes of project management. Read more about this type of standard in Chapter 1, “Project Management Methodology.”

Project Management Tools

The PMO should facilitate selection of the preferred project management tools used in the project management environment. This particularly represents the specifi- cation of a cross-functional project management information system that is used by all projects to capture pertinent project information. It also includes oversight for selection of all tools being used in the project management environment and distinguishes standard tools from those having limited use by selected individuals. This selection of standard tools should ensure that project management and busi- ness interests in project data collection, reporting, aggregation, and sharing are well served. All in all, the PMO also should ensure that the selected tools will not overly burden project managers and other users but will expedite timely and accurate proj- ect information management. Read more about applying tool standards in Chapter 2, “Project Management Tools.”

Project Performance

The PMO should facilitate the selection of performance standards for project management. This means defining when a project starts and ends, what consti- tutes satisfactory progress, what constitutes a successful project, and what status or conditions warrant some level of additional management intervention. Project performance standards also reach into the specification of project selection (and termination) criteria, which is normally contained in project portfolio management guidance. In some cases, performance standards are industry or market driven; in others, business processes of the relevant organization are the predominant influ- ence. The PMO will want to select standards that produce project outcomes that help achieve strategic business objectives. Such performance standards are dis- cussed further in Chapter 17, “Project Portfolio Management.”

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Technical Performance

The PMO may facilitate or otherwise assist in the selection of technical perfor- mance standards. The caveat to this standards selection effort is the consideration of whether the PMO is also the technical leader in the primary discipline used on projects. Sometimes it is, and in such cases, the PMO has a primary role to define the accompanying technical performance standards. However, in cases where the PMO has purview over multiple disciplines, it can still facilitate technical standards selection, but it then relies on the technical leaders in each discipline to recommend and substantiate the preferred technical performance standards.

Individual Performance

The PMO should facilitate the determination of individual performance standards. This usually focuses on performance of the project manager but may also include performance of project team members. Selected performance standards can be incorporated into position descriptions, particularly if a professional project man- ager career path has been established. Otherwise, more general standards for indi- vidual skill and experience can be applied at the time of project assignment.

Product/Service Quality

The PMO may facilitate the selection of product/service quality standards. Again, the consideration of primary versus multiple technical disciplines comes to bear. In either case, the PMO should ensure that appropriate quality management stan- dards are in place in the project management environment. An added point to consider is organization-wide quality certification. The PMO must ensure that any certification standards being pursued or achieved are clearly integrated into project, technical, and individual performance guidance.

Introduce Preferred Standards

Although the process for introducing preferred project and business management standards into the project management environment is not particularly complex, it does warrant discussion to ensure proper positioning for users and effective imple- mentation within the organization. The PMO will know how to work within the nuances of its environment and can follow the following general steps when intro- ducing standards.

Stakeholder Concurrence

It is essential that key stakeholders within the project management environment— project sponsors, project managers, project team members, and business unit

Standards and Metrics  ◾  81

managers—acknowledge and accept the standards that the PMO introduces. Moreover, the final decision to implement new standards normally resides at the executive level. Not only should the PMO be able to demonstrate benefits of a stan- dard for executive consideration, but the PMO also should be able to win endorse- ment from the user community. Consequently, the list of key stakeholders should be expanded to include technical experts for technical standards and functional managers for standards having heavy business impacts.

Key stakeholders can be included at various junctures in the standards iden- tification, review, and deliberation process. The various stakeholders may have differing interests and levels of influence in the selection of standards. However, successful standards implementation requires all stakeholder groups to be repre- sented in the standards selection process.

Standards Implementation Planning

The PMO can either conduct or facilitate standards implementation planning. The extent of planning required depends on the impact that standards introduction will have on the business of the relevant organization and the activities within the proj- ect management environment. In some cases, standards implementation planning may be as simple as a page change or as complex as a new approach to business. Whereas one takes less than a few hours to complete, the other may take more than a few days just to get planning underway.

In general, the PMO will want to consider the following planning elements for standards implementation.

◾ Identify the standards “owner”: Identify who will be responsible for managing the implementation and monitoring the use and effectiveness of the preferred standard. This may be someone either aligned with the PMO or external to it. Assist the “owner,” as appropriate, in preparing the remaining elements of the standards implementation plan.

◾ Specify the standard: Prepare a brief description of the standard to be imple- mented for use in announcements and notifications.

◾ Notify of the decision to implement: Determine the timing, method, and con- tent of the notification of new standards to stakeholders and any other rel- evant internal or external audience. Identify whether any special promotions and advertising need to be included in the notification.

◾ Check current practices and guidance: Examine whether any current standards are being modified or replaced by the introduction of the new standard. Include planning to address any impacts.

◾ Identify the standards reference locations: Resolve where the new standards will reside (for example, in documents, in electronic files, on Web pages, on a big sign at the entryway, and so forth). Plan for incorporating changes or adding the new standard to these media locations.

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◾ Identify the standards implementation team: Determine if this is a simple stan- dards introduction or one requiring more than one person to implement. Specify the activities that will identify (and form, if necessary) the implementation team.

◾ Prepare the standards implementation work plan: Ascertain what activities will be performed to implement the standard, and incorporate cost, schedule, and resource requirements. Assign or facilitate the standards implementation team to perform primary planning.

◾ Specify any necessary standards training: Decide whether implementation of a new standard warrants any significant training for those individuals who will be tasked to implement it, as well as those who will apply it.

◾ Obtain final decision to proceed: Determine whether a final decision is required to proceed with implementation of the standard. Specify who makes that decision and when it is made.

Standards Implementation

The PMO will perform or monitor standards implementation in the project man- agement environment. This task can be performed for a distinct project manage- ment standard or a technical or business-related standard that must be integrated into the project management approach.

If an authority outside the PMO is conducting the implementation, the PMO should be a collaborative partner for that portion of standards implementation that affects the project management environment. In such a case, the PMO should accomplish the following:

◾ Review the standards implementation plan for the PMO’s required imple- mentation actions to include identifying the need to assign one or more resources to the implementation effort.

◾ Determine when standards implementation begins and ends, noting that implementation could be a simple and immediate event. Manage PMO involvement in the implementation effort.

◾ Identify what standards monitoring requirements will be required during and after implementation. Assign one or more resources to the monitoring effort.

◾ Report the achievement of standards implementation to the vested authority.

If, however, the PMO is implementing a standard within the purview of its own authority, it can conduct its own planning (treating a complex effort as a project), and it can then monitor and manage implementation from that perspective.

Conduct Benchmarking

Implementing standards in the project management environment is a business decision that warrants monitoring and measuring. Benchmarking provides for

Standards and Metrics  ◾  83

initial and subsequent measurements to verify whether applicable standards are being achieved. It provides a comparison between the current state—of practices, procedures, policies, products, tools, people skills, and other bases for measuring effective project performance—and what should or could be. In the project man- agement environment, assessments often represent benchmarking based on the inherent standards of the assessment model used. See Chapter 6, “Assessment,” for further discussion of assessment activities in the project management environment.

There is another prevalent context in which benchmarking is conducted relative to standards found in industry or in particular organizations in the industry, either involving competitors or business leaders believed to use best practices. This type of benchmarking, at the very least, suggests an informal acceptance of the competitor or business leader as having a “standard” that warrants comparison. However, this is a valid benchmarking endeavor for the PMO to pursue, particularly when the organizations examined are known to be top performers that justify the “standard” reference. It is similarly a bona fide effort when performing benchmarking against several organizations in an industry to indicate the standing of the PMO and its relevant organization within the industry. In contrast, cross-industry benchmark- ing has been selectively attempted and can be an enormous challenge when pursued independently. In that regard, the PMO may want to seek out industry partners to conduct collaborative benchmarking activities that provide mutual benefit.

Many areas and activities of the project management environment can be bench- marked. The PMO may simply consider focusing its benchmarking efforts on the more prominent standards it has introduced into the project management environment.

Benchmarking identifies the difference or “gap” between the current state and the preferred standard or best practice. Benchmarking allows the PMO to establish or quantify the position of its current state as a reference for future measurements that indicate advancements toward achievement of results associated with a pre- ferred standard or best practice.

The following are suggested simple steps for the PMO to consider and expand further, as needed, when conducting benchmarking activities within the project management environment:

◾ Identify the standard (including best practices or organizations) to be examined ◾ Specify the capability and resources required for the benchmarking effort ◾ Plan the benchmarking approach and activities ◾ Conduct benchmarking data collection ◾ Perform benchmarking comparison analyses ◾ Reset the benchmark point by recalibrating from any previous benchmarking

of the standard

These steps are designed to focus the PMO on establishing benchmark points. It is presumed that additional planning to introduce the standard will be conducted, but that can be done within the context of implementing the preferred standard.

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It is possible, however, that the PMO could use benchmarking simply to evaluate its own position against a preferred standard and then decide not to further pursue actions to achieve that standard. Of course, this is not the practice when the PMO is benchmarking to establish a baseline or recalibrate its position for a formally selected standard. In that case, planning or replanning associated with introducing the standard should be carried out.

Benchmarking acts like a bridge between standards and metrics. In many ways, benchmarking is the measurement that links standards and metrics. The concepts and considerations of using metrics in the project management environment are presented in the next section.

Determine Project Metrics Requirements The PMO will be involved or influential in determining which metrics are used in the project management environment. In many cases, it will have responsibility for identi- fying the metrics that are applied to project, technical, and business performance or are captured from measurements, such as tracking efforts, assessments, and audits. To that end, the PMO is responsible for metrics comprising the various sets of data that repre- sent and quantify either prescriptive guidance or results from directed measurements.

Similar to the business environment, metrics have a wide variety of uses in the project management environment. In general, metrics can be used in the project management environment to

◾ Facilitate decisions (for example, go/no-go criteria, project selection/continuation, and so forth)

◾ Specify project classification ◾ Provide common understanding of project and activity status ◾ Manage project performance ◾ Convey a concept or model ◾ Monitor consistency and improvement ◾ Determine trends ◾ Ensure compliance ◾ Ascertain capability ◾ Identify performance goals ◾ Determine project management maturity

While this list offers a few primary uses of metrics, PMOs can likely identify more uses relative to their business interests. Recognizing how metrics can be used in the project management environment allows the PMO to determine which met- rics are required in the relevant organization.

This PMO function model focuses on three metrics requirement areas: process management and improvement metrics, project performance metrics, and business management metrics. A discussion of each is presented in the following subsections.

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Identify Process Management and Improvement Metrics

The PMO will likely have responsibility for a number of interrelated processes that are relevant to project management, and it should develop guidance and measure- ment metrics for these processes. A high-level perspective on process management and improvement metrics is provided for five process areas having PMO interest.

Project Management Methodology Processes

The PMO should develop and capture metrics for using the methodology and for determining its effectiveness (and thus the extent of any need for improvement). This includes identifying metrics for

◾ Frequency of prescribed activity use (e.g., reporting, auditing, plan review- ing, risk monitoring, etc.)

◾ Levels of prescribed activity participation (such as project manager, team members, business managers, project executives, customer, etc.)

◾ Process scalability (i.e., conditions of project classification for process element use/nonuse)

◾ Extent of project management information collection (required forms and template use, required data items, required data collection timing, etc.)

◾ Process review frequency (quarterly, annually, for each project, etc.) ◾ Progress of methodology contributions toward the desired level of project

management capability (and organizational maturity)—through develop- ment of metrics in specific interest areas (e.g., cost, schedule, and resource utilization; planning effectiveness; risk management improvements; etc.)

The PMO should develop its plan for applying project management methodology process metrics in conjunction with methodology and practice management oversight.

Technical Processes

Technical processes are ideally integrated within the project management method- ology and are based on the specific nature of technical work performed. To ensure proper alignment with project objectives, however, technical process standards will likely warrant a separate set of metrics. The PMO will need to collaborate with technical experts to define any process metrics within a technical discipline or industry. It also can examine some general metrics considerations, such as

◾ Particular technical process applicability to the type of project ◾ Specification of preferred technical tools and models ◾ Technical information management ◾ Technical product quality management (See more on quality management in

the section on performance metrics below.)

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Again, presuming that there is close alignment with the project management methodology, technical metrics can be embedded during development and imple- mentation of the project management methodology, making them manageable in that context. Otherwise, they can be managed independently of the methodology.

Business Processes

Business processes that are used in the project management environment should be integrated with the project management methodology to the extent possible. Methodology users in the project management environment may not always them- selves perform the specified business processes; therefore, the PMO is responsible for extending its collaboration with functional managers to create any necessary business process metrics. This usually involves factors of when, where, and how the business aspects of project management will be performed, as well as who will perform them. Some business process metrics to consider include

◾ Timing and responsibility for project opportunity transition from “sales” to project management

◾ Scope and contract-acceptance criteria ◾ Change management criteria ◾ Customer interface issue management and associated customer protocols ◾ Vendor and contractor selection criteria ◾ Project financial and contractual close-out requirements

While business processes and their associated metrics can be incorporated into the project management methodology, the PMO must ensure that business man- agers at least concur with, if not endorse, the business processes with which the methodology and the associated metrics are aligned. In some instances, business managers will develop and provide such business process metrics to the PMO for use in the project management environment.

Resource Management Processes

Because it has a responsibility for resource integration, the PMO should communi- cate and collaborate with the human resources department when it defines metrics for resource management processes within the project management environment. Some resource management process metrics that the PMO might consider establishing include

◾ Resource assignment responsibility (timing and criteria) ◾ Resource performance review responsibility and performance ratings ◾ Project management and technical training eligibility criteria ◾ Management protocols and their use for resource performance issues ◾ Resource sourcing criteria (such as internal resources versus external contractors)

Standards and Metrics  ◾  87

Where appropriate, resource management process metrics can be incorporated into the project management methodology; otherwise, it can be used indepen- dently by the PMO.

PMO Support Processes

The PMO should define the necessary metrics that constitute how it conducts its own support activities within the project management environment, that is, the functions of the PMO. The PMO may develop operating processes to help achieve its prominent functions, which would justify considering metrics. In general, the PMO can evaluate the effectiveness and efficiency of each PMO function it imple- ments. This would include establishing metrics in such areas as

◾ PMO staff workload levels and coverage ◾ Criteria, priorities, and guidance for PMO project support activities ◾ PMO reporting frequency, content, and criteria ◾ PMO level of process redundancy within the relevant organization

Individual PMO functions, however, may warrant a more detailed examination of metrics needs and requirements.

Identify Project Performance Metrics

PMOs at all stages will have a vested interest in project performance. Indeed, in some cases, project performance oversight is a primary purpose for the PMO’s existence. In that respect, it needs to develop guidance and measurement metrics for such performance. In discussing project performance metrics in this section, much of the metrics implementation can be associated with the development and implementation of the project, technical, and business processes with which these metrics are aligned. Thus, many of these metrics will be incorporated into the proj- ect management methodology or technical and business processes that the PMO constructs. In other cases, the PMO will develop metrics for internal use in its functional processes.

This section highlights the metrics that should be considered in several perfor- mance areas of interest. A high-level perspective on project performance metrics is presented for the following five key project performance elements. The PMO can consider developing metrics for other performance areas as it deems necessary.

Budget

The PMO should provide metrics for developing and managing a project budget to include both guidance metrics and measurement metrics. Beginning with the planning effort, the PMO can offer a list of standard cost estimates for common

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activities. In some instances, this is derived from internal lessons learned, or the PMO can validate and implement industry-standard budget estimates. The PMO should prepare funding authorization guidance that explains what routine fund- ing limits can be considered, as well as the criteria for elevating budget authority. This might include metrics for standard funding of each project phase based on project classification. The PMO also can specify metrics for contingency funding stipulated as a percentage of the project budget. As a project approaches the imple- mentation phase, the PMO should supply budget metrics that guide project cost management and reporting. This includes metrics for using earned-value cost con- cepts, cost variance models, and budget trend analyses and forecasting indicators. The use of budget performance metrics ensures that every project remains within cost or that corrective actions are taken in response to indicators that identify when a project budget is experiencing difficulties. In addition, the PMO can use budget metrics to compile aggregate project cost and budget results, plus related indicators for all projects within its purview.

Schedule

The PMO should provide metrics that aid in managing and controlling the proj- ect schedule. Guidance metrics are applicable in such areas as suggested duration estimates for common activities identified during the early project planning phases; preferred depth of activity coverage within a work breakdown structure (WBS); and identification of the number and types of activities that can be concurrently sched- uled based on project classification. Similarly, schedule measurement metrics are essential in tracking schedule performance during project implementation. The PMO will want to consider those metrics that are applied to earned-value schedule con- cepts, schedule variance models, and schedule management analyses. Using schedule performance metrics ensures that every project remains on schedule or that corrective actions are taken in response to indicators that identify when a project schedule is experiencing difficulties. Again, the PMO can use schedule metrics to compile aggre- gate project schedule results and indicators for all projects within its purview.

Resource Management

The PMO will want to consider the use of metrics that help ascertain the perfor- mance of resource management on projects. At the outset, there are comparable guidance and measurement metrics for resource management in projects similar to those for budget and schedule. These include such metrics as the suggested number and type of resources for common activities, learning-curve diagrams for resource estimating, and resource-acquisition timing indicators. The PMO should exam- ine these metrics plus any others that contribute to effective project planning and expedite the assignment of necessary project resources. Later, during project imple- mentation, the PMO should consider metrics such as resource-utilization trends

Standards and Metrics  ◾  89

and variances, assignment completion rates, and resource availability. Similar to the previously mentioned metrics for budget and schedule performance, resource performance metrics also allow the monitoring of planned and current status of resource utilization and, if necessary, the application of enabled corrective actions when resource performance difficulties surface during a project. In the case of resource performance, the PMO also gains effective oversight of resource utiliza- tion across projects when appropriate metrics are introduced.

Another aspect of resource performance—the acquisition, assignment, and management of the human facet of project management—warrants PMO atten- tion for metrics. With the help of guidance and measurement metrics, project managers and the PMO will be able to properly staff projects and manage indi- vidual performance. Metrics in this area include focusing on resource pool or other internal source availability rates, hiring needs versus use of external contractors, resource manager participation in preparing and assigning resources, individual performance trends and analyses, and team cohesion and performance indicators. The PMO should devise the metrics necessary to properly integrate resources into the project management environment, consistent with the resource allocation and assignment practices of the relevant organization.

Risk Management

Risk management is an inherent component of project management, and virtually all effective PMOs and project managers acknowledge the need to manage proj- ect and business risks. The PMO needs to confirm that perspective by developing the necessary guidance and measurement metrics to facilitate effective project and business risk management.

The common risk management process calls for identifying, prioritizing, and responding to risks that could affect projects. In some project management envi- ronments, risk is distinguished between events having potential adverse impact and those having potential positive opportunities. In that regard, the PMO should develop and implement metrics that address the relevant organization’s process and business approach to risk.

Guidance metrics for risk management can include such items as specification of standard risk events and responses; preferred response strategies for major types of risks; frequency of risk examination and analysis; frequency and type of risks encountered on common projects, along with the preferred solution that can be incorporated in the project planning phase; common risk impacts on project per- formance; costs of proactive versus reactive risk response strategies; and ranges of risk fund allowances per the project classification. The PMO needs to ensure that project managers and risk managers have sufficient guidance to deal with the risks that are identified and the risk events that are encountered.

Measurement metrics assist the PMO in oversight of projects, but measurement results also contribute to the development of metrics guidance that can be used on

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subsequent projects. The PMO will want to consider such metrics as the average number of risks identified for each project (by project classification), the number of risk events that actually occurred (whether or not identified in advance), the number of risk events (identified and actual) associated with project teams and individual project managers, and the cost of responding to risk events (on aver- age and by project). Moreover, one of the more underappreciated aspects to risk management involves managing the value of the project, as outlined in the business case. Metrics should track the reliability and validity of the business case value calculations during the project. Together, this collection of metrics should enable the PMO to identify and assist the project manager in responding to potential risk impacts on a real-time basis or in analyzing overall risk management performance and improving practices and individual competency for future projects.

Quality Assurance

Quality assurance performance tends to be aligned with the technical aspects of the work performed. The extent of PMO involvement in technical oversight determines the nature of the quality assurance metrics that the PMO introduces into the proj- ect management environment. However, every PMO has inherent responsibility for quality on all projects, regardless of its technical oversight and alignment. Quality assurance metrics remain, therefore, within the PMO purview.

Quality assurance guidance metrics can include such considerations as identifi- cation of quality standards criteria (as may be influenced by organizational quality certifications or internal policies); frequency of customer deliverable specification and project scope reviews; allowable variations in product/service quality; and con- tent and frequency of quality assurance reporting, including criteria for special reporting or elevation of quality issues.

Quality assurance measurement metrics should include such items as quality variance values at interim checkpoints, number of project/contract scope changes requested and approved affecting deliverable specifications, quality difficulties or defects associated with particular project teams and individual project managers, average customer acceptance rates and timing, and contribution of lessons learned from quality performance. Quality assurance also applies to the project manage- ment aspects of performing the project work and producing its prescribed deliver- ables—products and services.

A PMO that is heavily involved in the technical aspects of the project will want to convene its senior technical experts to define more detailed metrics for use in perform- ing technical activities and in achieving customer product and service specifications.

Identify Business Management Metrics

In its role as business integrator, the PMO will want to (1) ensure that applica- ble business management metrics are introduced into the project management

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environment and (2) provide applicable project information to project stakeholders having direct responsibility for business management. The PMO should introduce metrics that provide for this mutual exchange. It should attempt to build these met- rics gradually, leveraging commonly supported elements first and then demonstrat- ing the success of early metrics before increasing the range of business management metrics that are implemented in the project management environment.

A high-level perspective on business management metrics is presented for the following four key project management elements.

Contract and Agreement Metrics

The PMO should provide metrics to ensure that contract formats and content are achieving strategic business objectives. This includes metrics for pricing strategies, customer payment management, invoice distribution, and customer prequalifica- tion. Of course, the PMO should also adopt metrics for contract change manage- ment to maximize and control the legal aspects of project management.

Customer Satisfaction Metrics

The PMO should develop and implement metrics that enable the relevant organiza- tion to ascertain customer and customer-group satisfaction with project deliverables and to identify the opportunities for long-term customer relationships. In particu- lar, the PMO should apply metrics that help identify and rectify customer problem areas with minimal impact on marketplace perceptions of project performance.

Project Portfolio Management Metrics

The PMO is ideally positioned to convey project information between senior man- agement and the project management environment. It should use this advantage to construct metrics that facilitate project portfolio management. This includes defining metrics that assist in formulating decisions about project selection, con- tinuation, and termination. It also includes developing metrics that help to review aggregate project performance, identify strong and weak project performance areas, and assess ongoing alignment with strategic business objectives.

Financial Metrics

Although the consideration of financial performance metrics may be a part of any of the previous business management areas, it is often aligned with project port- folio management. It is highlighted separately here to enable examination of such factors as revenue generation, expense trends, and bottom-line analyses. A separate examination of financial metrics also may be expanded to provide the PMO with the analysis and insight to implement or recommend improvements in the areas of

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project cost estimating, project pricing strategies, project expenditure allowances, vendor and contractor cost qualification criteria, and project staffing costs.

Introduce and Use Project Metrics Once it has developed the necessary metrics for the project management environ- ment, the PMO must ensure their integration into appropriate processes and their use according to design. The latter is particularly important to the PMO because it normally designs the use of metrics to guide and measure results across a collec- tive set of projects within its purview, and it should ensure that metrics are applied consistently to all projects.

Because the PMO will predominantly seek a big-picture view of all projects, it should introduce metrics to serve project managers while also fulfilling its purposes of oversight, control, and support, based on its charter. To that end, there are three primary activities that should be accomplished to introduce and use metrics in the project management environment: preparation of a metrics measurement plan, comparison of metrics performance, and establishment of corrective actions. Each is discussed in the following subsections.

Establish Metrics Measurement Plan

When the PMO designates a metric, it should be prepared to monitor and manage it at a higher, aggregate level of examination. Therefore, the PMO should be cogni- zant of and track all of the metrics it has constructed—both guidance metrics and measurement metrics—as they are intended for use within the project management environment.

The focus of the metrics measurement plan is on measurement metrics, which are used to track project, technical, and business performance and to provide timely indications about project conditions or status. Measurements that use prescribed guidance metrics also enable the PMO to examine and improve its guidance metrics.

The PMO should actively monitor and manage metrics that it prescribes in the project management environment. This can be accomplished by developing a metrics measurement plan for the project management environment. This plan will help the PMO organize and manage the prescribed metrics plus their individual and collective values to the relevant organization.

The following are suggested elements of a metrics measurement plan for the project management environment.

◾ Measurement sources: Prepare a brief description of the metric and its intended use; identify what project data are used to measure the metric.

◾ Measurement levels: Specify the level of detail and type of data to be obtained from the metric to be used; identify any special competencies or authority needed to obtain measurements for the metric.

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◾ Measurement frequency: Indicate how often metrics measurements are needed and used, for example, the time frames for each project phase.

◾ Measurement performers: Identify who is responsible for conducting mea- surements relative to each prescribed metric. (This may be integrated into the project management methodology or into the associated technical and business processes, or identified separately when there is no associated process.)

◾ Measurement consumers: Designate who should receive data or reports con- taining measurements based on prescribed metrics; clarify when special mea- surement analyses are needed and for whom.

In essence, the metrics measurement plan specifies the compilation of all prom- inent metrics for which the PMO is responsible. It allows the PMO to consider how and when the metrics are applied, and it enables ongoing examination of the values of the metrics that are implemented. The PMO can refine or adapt the contents of this measurement plan to fit the needs of the relevant organization.

Compare Metrics Performance

The metrics measurements accomplished per the measurement plan should provide appropriate and sufficient data to evaluate each metric or set of metrics used in the project management environment. This enables the PMO to perform comparative analyses on project, technical, and business performance in areas in which metrics have been introduced.

Beginning with an analysis of metrics from specific project efforts, this activity can include both in-progress analyses and postproject analyses. Thereafter, aggre- gate analyses of metrics across all projects are conducted. These analyses examine the application of guidance metrics and the results of measurement metrics to iden- tify how well projects are achieving specified objectives. In conjunction with the real-time project oversight that it performs, the PMO also examines project perfor- mance trends resulting from the introduction of particular metrics.

A metrics review is then conducted at intervals (specified by the PMO) to ascer- tain how well-chosen metrics are benefiting project efforts and the organization’s business interests. This includes examining how consistently metrics are being applied to projects and the reasons why they are not being applied according to prescribed procedures. This review also closes the circle of this PMO function in that it identifies what progress has been made toward achieving any associated standards in the project management environment.

Establish Corrective Actions

Like standards, metrics are applied to improve performance in the project manage- ment environment. The PMO has a vantage point in its examination of cross-project

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results of standards and metrics implementation. Thus, it can provide remedies—in projects immediately and in the total practice over time—as described below.

Project Corrective Action

The PMO should examine metrics from project status reports and other sources to determine whether there are any troubled projects that warrant its interven- tion. If any adverse indicators are discovered, the normal PMO response is merely to confirm that the project manager is attending to the problem. If, however, indicators are more severe, the PMO may want to delve into the details with the project manager at a regular or special meeting and provide recommended cor- rective actions.

Along with this immediate response to a specific project, the PMO can also use its cross-project perspective to evaluate the preferred corrective action responses for a variety of metrics indicators. The PMO can then incorporate these corrective actions into the project management methodology as a reference for future use by all project managers.

Practice Corrective Action

The PMO, in its examination of metrics, will be able to discern where strengths and weaknesses exist in processes and procedures used within the project management environment. Similarly, it will be able to determine when metrics are appropri- ately applied or bypassed in favor of individual solutions. The PMO can take cor- rective actions at the practice level to bolster preferred metrics application within the project management environment. This type of corrective action could also be achieved through adjustments to the project management methodology. However, rather than being a simple effort, methodology modification might affect processes, which would then have an impact on the established use of metrics.

Postscript for the Smaller PMo This model has presented some advanced concepts and complex practices that pro- vide for comprehensive management of standards and metrics in the project man- agement environment. It is not likely that the smaller PMO will have either the staffing or the authority to construct such an elaborate function. Therefore, it may be appropriate for the smaller PMO to focus simply on the following two funda- mental activities to fulfill its responsibility to manage standards and metrics within the project management environment.

First, identify a practice standard for project management. This effort alone may require considerable time and collaboration with project stakeholders, and particularly project managers, to achieve consensus in selecting a preferred

Standards and Metrics  ◾  95

standard. Prominent issues will likely include contemplating how the standard will be deployed in terms of process guidance, whether project management and tech- nical processes will be integrated or linked, who will develop it, and how long it will take to be deployed. If necessary, start by developing only a few of the more critical processes, but prepare plans for a full life cycle methodology in the foresee- able future. As initial PMO activities go, establishing a standard for conducting project management is somewhat of a priority. Once established, it then becomes a practice standard that serves as a frame of reference for many other activities in the project management environment. It also provides the basis by which the PMO prescribes additional project management guidance and monitors and manages project performance.

Second, focus on project performance and ascertain what information project stakeholders need to do their jobs. Construct a few primary metrics that enable key project stakeholders to make decisions and take actions consistent with their responsibilities, to include the following stakeholders.

◾ Project manager: Makes daily decisions to keep individual projects on track and reacts to problems and issues encountered. Metrics are constructed to help manage cost, schedule, and resource utilization, accompanied by metrics to facilitate risk and quality management. In most cases, these supporting metrics can be embedded in the project management methodology.

◾ Project team members: Apply technical skill and knowledge, along with aware- ness of prescribed project management activities, to achieve project deliver- ables. Metrics can be constructed to help them manage their personal work efforts and associated work time. As well, metrics can be used to provide proj- ect team members with indicators of work quality—before critical technical or customer reviews are conducted.

◾ Project sponsor, project customer, and the PMO: Evaluate project progress based on reports from the project manager. Metrics are constructed to provide quick indications of project progress, what problems and issues remain unresolved, and whether established plans and expectations for project deliverables are still valid.

◾ Project specialists and business managers: Include business analysts, project schedulers, risk and quality management professionals, and business contract administrators who routinely contribute to the project information database. Metrics are constructed so that these specialists can apply standard input and analyses of conditions in the same manner for every project.

◾ Project vendors/contractors: Perform assigned aspects of project work per estab- lished contracts or subcontracts. Examine metrics constructed for internal use to determine if they can also be applied to external project participants. If necessary, develop metrics specifically for vendors and contractors to help them (and the relevant organization) in overseeing their work performance, timely completion of deliverables, and associated invoice management.

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◾ Project executive and senior managers: Evaluate project performance from a business perspective. Metrics are constructed to address customer satisfac- tion, ongoing business case validation, and appropriateness of fit within the portfolio of projects. In particular, metrics for selecting, continuing, and ter- minating projects are needed for this stakeholder.

These are perhaps the most important metrics for key stakeholders in project management. They provide a solid start for the “standards and metrics” functional responsibility in a smaller PMO.

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Chapter 4

Project Knowledge Management

The emerging concepts of knowledge management are a prominent topic of debate: what it is, what it does, and who should use it. For the purposes of this project management office (PMO) function, knowledge management will be examined as coordinating organizational knowledge and information to enable increased project management capability and to achieve business value from that capacity. This concept elevates fundamental communications in the project management environment from mere data transfer to the conveyance of ideas, perceptions, expe- riences, and interpretations that transcend the simple exchange of information. When using knowledge management concepts, the traditional aspects of project management reporting and project information management are properly retained but are generally adapted to be more timely, comprehensive, and widespread among stakeholders and relevant to business interests.

Because the PMO is responsible for establishing the project information man- agement capability in the relevant organization, it can now employ the expanded features of project knowledge management to achieve its objectives. The “project knowledge management” function enables the PMO to

◾ Develop an approach to project performance reporting ◾ Construct an effective project management information system (PMIS) ◾ Facilitate collaboration among project managers, project teams, and project

stakeholders ◾ Manage activities of virtual and geographically dispersed project teams ◾ Implement a robust project management knowledge reference library

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◾ Capture and utilize individuals’ wisdom, perspective, intuitions, and experiences ◾ Promote a learning organization among project managers

The PMO’s knowledge management efforts should create a well-informed proj- ect management environment that operates efficiently, communicates effectively, and responds knowledgeably in providing customer and business solutions.

Project environment interface Concepts The PMO is charged with facilitating, if not directly handling, much of the proj- ect information that crosses desks, influences meetings, and enters boardrooms throughout the relevant organization. The PMO undertakes a major initiative and broad role that combines elements of oversight, control, and support in developing and implementing a project knowledge management capability. When properly constructed, the knowledge management system will be a tremendous benefit and distinct service in the project management environment and throughout the rel- evant organization.

The PMO’s “project knowledge management” function establishes the processes and means for reporting project progress and status. Progress is the specification of the advancements made in achieving planned project activities and objectives, that is, cost, schedule, and resource utilization management. Status is a determination of what that resulting progress signifies relative to project management effectiveness, contractual obligations, customer satisfaction, and business interests. The knowl- edge management system enables the generation and distribution of project perfor- mance information so that these status factors can be examined, interpreted, and, as necessary, acted upon by a wide range of project stakeholders.

Moreover, the PMO will use this function to provide procedures and tools that facilitate project teams’ ongoing efforts to communicate, collaborate, and become a more cohesive unit, with particular consideration for those project team members not physically collocated. This activity includes establishing capability for such things as project level reporting, project task assignment and manage- ment, technical solution deliberation and discussion, task performance review and hand-off, and time management. In addition, this may also include acknowledg- ing external vendor and contractor participation in project activities and provid- ing them with appropriate access to selected areas of the knowledge management system. Furthermore, project management communication and collaboration can be extended to senior management by implementing an “executive dashboard” tool that provides real-time, business-critical information at a glance.

The knowledge management function can provide the modern, presumably electronic answer to the traditional “project binder,” where all project information resides. This function allows the PMO to introduce and integrate preferred tools that help the PMO, project managers, and other project stakeholders to develop

Project Knowledge Management  ◾  99

and manage project information and documentation. Accordingly, the PMIS tool is a prominent knowledge management component. It is used to capture and dis- tribute project data, such as cost, schedule, and resource utilization; develop and access project plans and documents; and maintain issues, meeting agendas and actions, and other important project logs.

Similar to the need for a standard “project binder” is the consideration for project archives, which includes possible alignment with a project management reference library. This enables access to such information as lessons learned, technical solu- tion guidance, and, perhaps, interactive discussions of prevalent business or techni- cal topics and personal insights in “chat rooms.” It also may address online training for project stakeholders across the relevant organization. Consequently, this PMO function can be used to establish and integrate the preferred project management reference capability for use within the project management environment.

Business environment interface Concepts Early PMIS’s were influential in information exchange and communication within the project management environment. The PMO’s knowledge manage- ment function introduces new capability that improves upon and expands that influence throughout the relevant organization while still maintaining the essen- tial information needed within the project management environment. Knowledge management recognizes the organization’s project information needs and drives the development of a solution that integrates project information with business interests. When this capability is implemented, the interactions between business units and individuals in the project management environment become more effi- cient and effective.

Individuals and business units that were previously unaware that they were project stakeholders will now be able to access the project knowledge management system for their own business purposes. Indeed, it is quite likely that any required project information will now be exchanged with routine efficiency.

Business units, in particular, that have interactions with customers, vendors, and contractors will gain more information and insight into these relationships. For example, business managers responsible for sales will be able to examine project performance and customer satisfaction; resource managers responsible for project team members will be able to review resource commitments; and senior managers responsible for business performance will be able to determine progress toward achieving strategic objectives.

The information and knowledge management tools needed in the business environment are essentially the same as those described above for the project man- agement environment. Some additional packaging, data calculation and compila- tion, and distribution methods—usually by electronic means—may be all that is necessary to provide benefits to the business environment.

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Project Knowledge Management Activities across the PMo Continuum The “project knowledge management” function along the PMO competency con- tinuum is represented by increased capability to collect and share project man- agement information and knowledge and a greater efficiency to accomplish it, thanks to the introduction of automated knowledge management application tools. Moreover, the PMO competency continuum reflects a progressively broader scope of project management information and knowledge access to entities outside the project management environment. In particular, the more developed PMO levels extend project management information and knowledge for sharing and integra- tion into business operations of the relevant organization. There is also the potential for extending knowledge management system access, on a selective basis, to exter- nal project participants such as customers, vendors, and contractors.

Table 4.1 presents an overview of the range of prescribed PMO knowledge management activities according to each level in the PMO competency continuum.

The project office applies the information and knowledge management tools and practices that are available for use in the project management environment. In the absence of a higher-level PMO, the project office will collaborate its needs with key project participants to establish a common approach for reporting project progress and status, as well as to identify a preferred tool to facilitate reporting.

Midrange PMO levels of the continuum have the responsibility of introduc- ing project information and knowledge management practices, ideally supported by automated tools and online applications. A prominent PMO effort at this level is “building” a PMIS that allows the organization to achieve an effective project management information and knowledge management capability.

The center of excellence participates in this effort in an advisory role to the proj- ect management environment and possibly lower-level PMOs, as well as to business units in the relevant organization. It furthers the functional effort by focusing on the implementation of advanced knowledge management tools and their intercon- nectivity for greater efficiency of communication and collaboration within the proj- ect management environment.

This PMO model promotes the timely transition from information system management to the expanded project management communication and collabo- ration capability found in the context of the emerging knowledge management discipline.

Project Knowledge Management Function Model The PMO’s “project knowledge management” function model presents a capability to communicate and collaborate within the project management environment and with stakeholders in the business environment of the relevant organization. The

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model addresses project management information handling, particularly through the progressive implementation of knowledge management tools and techniques. However, this model does not attempt to introduce all concepts and considerations of the knowledge management discipline in an exhaustive manner. Rather, the PMO can use this model to guide the introduction of those knowledge manage- ment components that are aligned with project management communication and collaboration exchanges.

The prominent activities of the PMO’s “project knowledge management” func- tion model are depicted in Figure 4.1. Each activity is described in the following subsections.

Any PMO implementing a knowledge management capability must consider the culture of the relevant organization while knowledge management is being planned. In this case, organizational culture represents the manner in which peo- ple within the organization interact, together with the responsibilities and actions they accept as appropriate. Instituting knowledge management affects the orga- nizational culture and brushes up against people’s beliefs and values. This con- dition must be considered while the elements of an effective project knowledge management system are discussed and deliberated. Afterward, people, for the most part, will gain an understanding of knowledge management concepts, as well as an appreciation for how their personal use of knowledge management ultimately contributes to achieving business interests and objectives. The PMO can facilitate this acceptance by proceeding with implementation at a pace acceptable to the organizational culture.

Establish Knowledge Management Framework The PMO, in close coordination with business unit managers and particularly the information technology (IT) department, should design a strategy for imple- menting knowledge management within the project management environment. This entails creating a knowledge management framework that will guide the

Establish Knowledge Management Framework

Information management Document management Process management Collaboration management Project archive and reference library management

Introduce Knowledge Management System

Conduct installation and establish connectivity Perform function and feature customization Introduce project knowledge management content

Implement Knowledge Management System

Develop project management information system (PMIS) Develop executive dashboard Construct project management library Implement online project collaboration Implement other knowledge management tools

Figure 4.1 “Project knowledge management” function model.

Project Knowledge Management  ◾  103

development of near- and long-term capabilities of knowledge management used in the project management environment.

The PMO should take the lead in defining the project knowledge management approach—what data and information will be collected, stored, and retrieved to facilitate project management; how such data and information will be used and transformed into knowledge; and the means (i.e., automated systems and tools) by which project knowledge material is produced, maintained, and applied to benefit project management and the business interests of the relevant organization.

When establishing the framework for knowledge management, the PMO must have sufficient understanding of knowledge management concepts in order to achieve proper initial planning and subsequent implementation of associated tools. First, the PMO should begin by recognizing that knowledge proceeds from—but is distinctly different from—data and information. Data usually result from quan- titative measurement. Information adds meaning, relevance, and purpose to data. Knowledge, in turn, represents information that has been transformed by human experience or interpretation. It contains such added values as judgment and under- standing about a matter or topic.

For the most part, knowledge is an organizational asset generated by people. It is codified or categorized to facilitate placement and application within the work- place, and then it is transferred or otherwise made available for use by other people. A number of automated tools can and should be used to facilitate the critical prac- tices of knowledge management.

This discussion is hardly intended to be a primer in knowledge management, but it does provide a fundamental frame of reference for what needs to be performed to introduce knowledge management into the project management environment. In lieu of having an internal knowledge management expertise, the PMO may need to seek the advice and services of qualified vendors and consultants, particularly as it considers implementing advanced knowledge management concepts and capabilities.

The PMO can begin its efforts to construct and implement a project knowledge management system by examining the communication and collaboration require- ments within the project management environment. This examination can be as detailed or as abbreviated as the PMO’s scope of responsibilities warrants. The fol- lowing are key components of a knowledge management system and framework for which the PMO can determine needs and develop an approach for implementation.

Information Management

The PMO must decide how pertinent information will be compiled, distributed, and used in the project management environment; identify those participants who will be responsible for information handling and management; and then plan and conduct implementation of the desired information management capability.

The PMO should use this knowledge management component to develop concepts that will guide the direction of the project and project management

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information handling capability within the relevant organization. The PMO can begin this effort by examining three key elements of information management.

Information Users

The PMO should know and account for the primary information users in the proj- ect management environment. The four broad categories of information users pre- sented below can be used to determine who needs project and project management information in the relevant organization.

◾ Project participants: Project managers, team members, and technical staff ◾ Project oversight managers: PMO, sponsors, executives, control boards, and

so forth ◾ External project stakeholders: Customers, vendors, and contractors ◾ Business managers: Business unit managers (e.g., sales, contracting, human

resources, etc.)

This list can also be used to determine who will generate or compile that infor- mation for dissemination and use within the relevant organization. The result- ing “information user requirements” will serve as the basis for the subsequent specification of project and project management documentation and information content.

Information Systems and Tools

The PMO, in close collaboration with the IT department, should know and account for existing information systems and information management tools that are used in the project management environment. This will provide a baseline for reference as the PMO proceeds to examine options for introducing new, automated mecha- nisms for information handling and knowledge management.

The PMO can identify and categorize current information system capability relative to four general types of information management tools, as discussed in Chapter 2, “Project Management Tools.”

◾ Paper based: Project management information is collected and distributed by hand but is likely supported by fundamental word processor, spreadsheet, or database software applications.

◾ Automated: One or more automated systems provide integrated collection of project and project management information as well as automated access and distribution for network-based information users.

◾ Web based: This is a variation on the automated approach that simply uses the Internet or an intranet as the preferred platform for project management information collection and distribution.

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◾ Personal digital assistants (PDAs) and wireless: This is yet another variation on the automated approach that expands the reach of the information system to mobile use via PDAs, mobile telephones, and other mobile devices.

The resulting “current systems and tools” list will provide a starting point or base- line from which the PMO can, in collaboration with the IT department, establish a direction for future use of automated systems and tools that will improve information management process capability, support project information handling needs, and contribute to the fulfillment of broader project knowledge management objectives.

Information Management Planning

Planning the future state of information management capability in the project man- agement environment can be a significant challenge for many PMOs, particularly when information management is presented as a component of the larger knowledge management endeavor. The PMO must gain a wider perspective on how to make infor- mation management efficient and effective. It needs to work across business units to examine and select appropriate information management systems and tools, and then implement resulting information management processes to achieve user satisfaction.

Nevertheless, the PMO should conduct information management planning within the project management environment using expert guidance and involve- ment from the IT department, along with participation and review of PMO recom- mendations from business unit and technical leaders in the relevant organization.

The depth and extent of information management planning will depend on the PMO’s responsibility and maturity within the relevant organization. The follow- ing are general activities that the PMO can complete or consider when conducting information management planning and formulation of future direction:

◾ Use established baseline conditions to determine what changes, if any, are needed in systems, tools, and processes for project information management— create a mapping of information processes and associated information flows.

◾ Examine and select new systems and tools that support current or desired information management processes, otherwise the new system or tool will mandate the process when it is implemented.

◾ Examine new systems and tools with regard for connectivity to current sys- tems, as well as for information transfer and exchange with current systems.

◾ Select new systems and tools with consideration for expanding the knowledge management capability in concert with achieving desired information man- agement capability—review information management together with other components of project knowledge management (see subsections below).

◾ Select one primary high-end automated project management tool that fits well in the organization, but recognize that tool customization or additional secondary tools may still be needed to fulfill desired capability.

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The PMO can use these items when planning information management capa- bility. Its plan and recommendations should be appropriately cleared with the IT department and coordinated within the relevant organization, and can be used to guide the introduction and implementation of information management systems and tools that will be used for project management as well as other project knowl- edge management needs. (See Chapter 2, “Project Management Tools,” for more information about conducting automated tool selection and implementation.)

Document Management

The project management environment inherently generates documents associated with projects. Documents represent bundles of data and information having inter- related content that is applicable to project as well as business management. As an element of knowledge management, the PMO will benefit from developing the means to facilitate project document management.

In developing this knowledge management component, the PMO will identify primary documents and how they will be used and managed, which is comple- mentary to the information management component described above. The PMO can begin this effort by identifying the types of documents that reside within the project management environment, to include such items as

◾ Project management plans ◾ Project management reports ◾ Technical documents ◾ Business documents ◾ Project records and logbooks

These documents will be examined more closely for content in the section on developing the PMIS. However, for our purposes here, the PMO’s focus is on estab- lishing the means for such documents to be managed as a part of the knowledge management effort. In particular, the PMO must determine whether it will build or retain a more or less simple automated file structure, acquire an automated docu- ment management system, or perhaps even install a content management system. These represent three primary means by which project participants and stakehold- ers can generate, store, and retrieve project documents, and they are presented below for consideration by the PMO.

Simple Automated File Structure

In this approach, document preparers and users will store and access electronic project documents on computers and networks. Documents stored on an individ- ual computer may not be readily accessible to the project team or other project stakeholders. In contrast, documents that reside on a network do provide ready

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access to all users in the project management environment according to the net- work access authority given to each user.

The PMO may use this “default” approach that is available in virtually all orga- nizations today. It may specify which project documents can be retained in indi- vidual computers and which are required to be stored on the network. As well, it may want to consider establishing a file and folder structure for documents saved to common project areas on the network, along with access requirements for the different project stakeholders. The word processors on most computers already have a file management capability that displays document filenames, size, and location on the system. Accordingly, the PMO can establish standard file directories and use an existing word processing application as the document manager.

Document Managers

This solution uses an automated system specifically designed to manage storage and access to multiple documents. This normally includes the capability to handle larger, more complex, and diverse types of documents that may be encountered and used in the project management environment, including computer-aided design (CAD) files, engineering drawings and specifications, and software engineering output. These examples and the like may justify the PMO’s consideration of acquir- ing specially designed systems or tools that facilitate the document management needs of the technical users.

In examining this approach to document management, the PMO should antici- pate an increased cost, because more advanced document handling features are included in the software application, designed specifically for project and technical document management. In some instances, systems or tools selected for project management collaboration will also include a document management feature or capability, and this can be considered by the PMO when evaluating such auto- mated applications. See more information on this consideration in Chapter 2, “Project Management Tools.”

Content Managers

This type of tool is used when there is a need for extensive use of recurring docu- ment content across a variety of technical and business documents. Essentially, content management provides data sets—chapters, paragraphs, drawings, and even words—that are available for reuse and insertion in multiple documents. This is accomplished through the data-set management capability of the content manage- ment system. An example of how content management can be applied in project management is the use of templates and repeatable content for project management plans. Most word processors and office suite applications can manage templates. However, the technical and business aspects of project management may warrant some consideration of content management.

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The requirements for developing customized products or other technical solu- tions may also indicate a need for a content management system that “translates” technical information into design and specifications documents. In addition, the complexity of associated contracts may require content management system sup- port to address the multitude of content options in individual customer and vendor proposals and contracts. Most organizations would consider the acquisition of a content management system to be a major operating expense—usually starting at a low six-digit figure—that demands validation of need. At the same time, content management systems can often be used for multiple purposes across the relevant organization as a means to justify the hefty cost. Furthermore, if the PMO designs a comprehensive knowledge management system, there may also be applications for the content management system relative to implementing the collaboration capa- bility, project archives, and project management reference library.

Process Management

Process guidance, like much of the other information in a project management environment, has traditionally been paper based. However, the advancing capabili- ties of information systems have increased access to and management of process guidance through automated means. For the PMO, the issues of process manage- ment deal directly with the “project management methodology” function, which ensures that all essential elements of project management, including links and inte- gration with technical and business processes, are accomplished. Thus, the knowl- edge management aspect of methodology management provides for the features of an automated platform on which the methodology resides.

In defining the needs for the project management methodology platform, the PMO should consider

◾ Access by − Project participants − Other stakeholders in the relevant organization − Customers and external vendors

◾ Translation and integration of methodology process content in − Project management Web-based information pages − Executive dashboards − PMISs − Business systems

◾ Coverage and capture of project management life cycle activity information

The approach that the PMO deliberates in this knowledge management com- ponent identifies how the project management methodology will be made available within the project management environment. This PMO effort should therefore determine (1) what systems it will reside on, be connected to, or interface with, and

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(2) what information will be made available to which project stakeholders as a result of that placement.

Automated process management capability is a feature that can be found in several middle- to high-end project management software applications. Therefore, the PMO should examine some of the relevant products in the marketplace if automated (methodology) process management is an objective within the relevant organization.

Collaboration Management

Collaboration within the project management environment presents the need for both personal contact and information or “knowledge management” contact. Collaboration also involves implementing facilitating processes and systems. The process factor is normally addressed through methodology process implementa- tion; the system factor, in the context of knowledge management, is the system mechanism or tool used to communicate or otherwise make critical information and guidance available to users.

Therefore, the PMO should examine this knowledge management component with consideration for the following.

◾ Collocation or geographical separation of project teams: The PMO should list all work locations of the project teams within its purview. This will enable a simple evaluation of physical location impacts and constraints on collabora- tion to include consideration of

− Single-location teams, where all team members work in the same local- ized facility—commonly typified by “walking-distance” personal contact

− Multiple-location teams, where team members perform various aspects of project works at different facilities—generally represented by some need and anticipation for short- or long-distance travel for routine or recurring personal contact

− Virtual teams, where team members work at home offices or at global or regional business facility locations and do not plan or anticipate routine personal contact

This examination should result in the identification of primary and geographi- cally dispersed work locations that are inherently part of the project management environment.

◾ Types of collaboration required: The PMO should determine the nature of col- laboration needed at each work location within the project management envi- ronment and consider communication and information exchange relative to

− Project performance reviews − Technical performance reviews

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− Business performance reviews − Project team coordination and development meetings − Project stakeholder meetings (e.g., management, customer, vendor/contractor) − Project team member assignments and coordination of task status − Project team time management and approval activities − Technical and business innovation forums − Project Web-based knowledge space reference pages − Cross-project collaboration, coordination, and information exchange forums

This examination should result in the identification of collaboration needs at primary or geographically dispersed locations, and a simple diagram showing proj- ect communication and collaboration requirements across locations can be devel- oped to illustrate the PMO’s findings.

◾ Complexity of technical and business elements: The PMO will need to recognize the impacts and special collaboration needs of more complex project solutions resulting from contract innovations, the introduction of new technology, or simply the complexities of the established technical solution and business interests. In this regard, the PMO can examine the

− Nature of collaboration required − Level of management involvement − Inclusion and availability of technical expertise − Participation by external stakeholders (and their collaboration capabilities)

◾ Collaboration management mechanisms: The PMO should identify what types of system applications or activities are necessary to facilitate collaboration efforts, to include consideration of the following collaboration mechanisms.

− E-mail: A message creation and distribution system, which represents a virtual standard in today’s business organizations for communicating and tracking project information.

− Instant messaging: A real-time message creation and distribution sys- tem, but which limits real-time communication and collaboration to those participants currently connected to the system. This capability is provided through certain types of online Web-based communication applications, selected Internet service providers, as well as some mobile telephone and paging systems.

− Face-to-face meetings: Real-time personal interactions used to facilitate deliberation and discussions regarding technical, business, and project management topics.

− Telephone conferencing: A means to provide real-time deliberation and discussion among participants. Because this system may constrain the number of active participants by relegating other conference attendees to listening-only status, it is not practical for more than a handful of participants.

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− Video conferencing: Similar to telephone conferencing, but it is enhanced by visual display of participants, as well as referenced displays and diagrams. These enhancements can incur considerable additional equipment costs, which the needs of the relevant organization may warrant, particularly if videoconference equipment and costs are shared across business units.

− Web-based collaboration: The systems and tools in this collection all per- form project-related communication and collaboration within the con- text of their connectivity to the Internet or an intranet. Some may be associated with network-based applications and are differentiated by the features offered. They include the following generic tools. • Web-based presentation systems, which enable online audiovisual

presentations to audiences of various sizes. Some systems provide for reruns of stored presentations—sometimes referred to as a Webcast or Webinar.

• Web-based communication systems—either an integrated feature of Web-based presentation systems or a separate application—enables interactive participation in question submittal and responses, voting, and polling in online presentations and meetings of larger audiences, and usually requires a participant–moderator capability.

• Web-based “chat” rooms and “blog” sites, which provide both real- time conversation mode and forum-type information “threads” on various pertinent topics.

• Task management systems, which provide for online assignment of project tasks to team members and others while also tracking and managing task progress.

• Online work spaces, which facilitate document and work-in-progress reviews by various project participants. Such work spaces can also transfer or exchange partially completed work products for use by other project participants. (This represents specialized use of project of knowledge spaces, which is reiterated in the next section about project archives and a reference library.)

− Podcasts: A means to provide audiovisual types of communication in presentations usually designed for handheld mobile devices, with capa- bility to download recurring or featured presentations to a mobile device through Internet or intranet access.

− Time management systems: A software application or online capability that provides for collection and management of individual participant time on project work; a feature that may be integrated with other com- puter or Web-based systems, particularly task managers.

The PMO should gain an understanding of the relevant organization’s collabo- ration needs and examine practical tool and system solutions in formulating its approach to the collaboration management component of knowledge management.

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Project Archive and Reference Library Management

The capability to access and use lessons learned from previous projects is an essential activity of effective project management. Through the construction of a project archive (that is presumably online), users are able to access pertinent information for review or for application to new project planning efforts. Similarly, a project management infor- mation reference library, enhanced by knowledge management tools and features, can assist project teams in their individual and collective performance efforts.

Applying the following general tools can help in creating and managing the project archive and reference library capabilities of this knowledge management component.

Project Information Storage Database

The project information storage database is the online project information center that contains critical information about past and present project work. It may be the primary tool selected for the PMIS that also has the capability and capacity to retain and access information on previously conducted projects. In particular, it addresses the project work breakdown structure (WBS), the project work plan (cost, schedule, and resource utilization), and the project risk management plan. This inherently provides indications of the accuracy of project estimates and allows standard estimates to be adapted for particular project use. This storage database may contain important project information components, such as project perfor- mance feedback and lessons learned, or this information may be captured using a project management knowledge space, described below.

Project Management Knowledge Spaces

This system-based tool extends the reference library features for accessing real- time and relevant project information and project management knowledge. Able to cover any imaginable topic the PMO may want to pursue, this tool includes user contributions in the form of project documents, technical papers, and online threaded or real-time discussions that essentially serve to expand the understanding of points and topics presented. After the PMIS, the use of knowledge spaces may be an organization’s single most valuable collaboration tool. Because it can also be a significant cost item, it warrants PMO consideration of the following types of knowledge space use.

◾ Technical knowledge space: Provides access to technical papers and presenta- tions that have value in the project management environment. This material can be compiled and stored on internal systems or provided via an Internet address for access at the source location. One or more knowledge spaces can be constructed to address multiple technical disciplines.

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◾ Project team knowledge space: Provides online capabilities to exchange ideas in a discussion forum, display the project work plan and track project progress, attach project plans and documents for project team members to access, as well as conduct planning and document review and approval activities.

◾ Project management forum: Provides online capabilities to exchange project management concepts and ideas, identify and discuss current practices and solutions applied to project efforts, deliberate best practices in project man- agement, and reference other relevant online forums. This is a cross-project knowledge space that all project stakeholders in the relevant organization can access.

◾ PMO knowledge space: Provides the PMO staff with a working knowledge space similar to that furnished to project teams. It can be used to assist in cre- ating and managing PMO functions, as well as to document PMO oversight, control, and support in the project management environment.

◾ Vendor/contractor knowledge space: Provides a means to identify and select vendors and contractors for project work assignments, manage their contrac- tual responsibilities, and track their performance for ongoing consideration in subsequent work assignments.

◾ Customer knowledge space: Provides a means to capture information about customers for use in the project management environment. Such concerns as customer project history, customer performance issues, and customer evalua- tions, in particular, can be captured and examined for future reference.

◾ Project management and industry news: Provides access to news articles (nor- mally as Internet addresses to Web pages) that are pertinent to the project efforts of the relevant organization.

◾ Project management publications: Provides a general review of project manage- ment and technical books and possibly incorporates a recommended reading list. This knowledge space also may contain a listing of relevant magazines and periodicals and may include an Internet address for online access to reviews or entire manuscripts.

◾ Project history knowledge space: Provides for Web-based display of relevant information from past projects, per information captured or derived from the project database—project descriptions, project classification, project results, and so forth.

◾ Project management training: Provides for Web-based review of internal and external training courses relevant to project participants. This consists of descriptions of optional and mandatory training and may also provide online training program registration capability.

These are a few ways in which knowledge spaces can be developed for use in the project management environment. The PMO should consider pursuing these, together with other types of knowledge spaces, to achieve a full-capability project archive and reference library.

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Project Archive and Reference Library Options

The project archive and reference library can contain the following optional features.

◾ Project management knowledge database: An internal/external online system that enables project management information, technical guidance, and practice refer- ence materials to be identified, collected, and stored as needed, or referenced for random access by users in the project management environment. This may not necessarily involve one system but, rather, a collection of several systems that pro- vide access to project management concepts and techniques, white papers, sam- ple tools and templates, online publications and project management news, and similar reference materials. The project management knowledge database may be a combination of the project information database and the project knowledge spaces and may possibly include other knowledge management access capabilities and features, which are also described in this section. In essence, this database represents the conceptual location for the project management reference library materials to be introduced for use in the project management environment, since this material will have to reside in a stored format somewhere.

◾ Search capability: The online project management reference library and knowledge management system should include the capability to search inter- nal knowledge databases, as well as external sources on the Internet, to locate needed information. In particular, automated search capability can be estab- lished to automatically seek information on the Internet using key words, phrases, or even names of vendors, contractors, or competitors.

◾ Executive dashboard: This may be a separate tool connected with the PMIS, or it could be presented in a knowledge space format. Inasmuch as informa- tion in this space will likely need to access the project database, creating this reference is a matter of PMO preference, with consideration for the capability that the primary project information database tool can provide.

◾ E-training: This library feature presents internal and external online project management and technical training programs that are accessible to users.

◾ Commercial project management portals: Many project management library fea- tures described in this list are available through this option. While some fea- tures are free, some have additional cost, usually in the form of an individual or organizational subscription fee. Most portals permit users to access various types of project management and technical information and publications; some include project management tools and templates that are available for down- load; and still others provide project team “knowledge spaces,” “chat rooms,” and discussion forums. This is a good alternative for the PMO to consider when it does not plan to pursue its own internal knowledge management system.

It is important to note that the automated focus of this discussion of project archive and reference library options does not preclude continued development of

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the traditional library, such as books, papers, and publications. In that regard, the PMO may wish to maintain a physical library in conjunction with its automated knowledge management system capability.

Introduce Knowledge Management System The preceding section discussed defining the knowledge management concepts and practices for the relevant organization. The discussion that follows considers the planning required to introduce the preferred approach. This includes identifying the configuration of recommended hardware and software; specifying what sys- tem customization or “buildup” is necessary; and preparing for project knowledge management content entry, transfer, and connectivity with other systems. These activities are described in the following subsections.

Conduct Installation and Establish Connectivity

It is the PMO’s responsibility to ensure that the hardware and software selected will achieve the intended project knowledge management objectives. However, it is normally the IT department’s responsibility to ensure proper system and tool installation and configuration for use in the relevant organization.

Therefore, the IT department, in collaboration with the PMO, should install the knowledge management system or tool and identify how each will be con- figured to operate in conjunction with other information systems in the project management environment (if there is more than one system) and with current and planned business systems in the relevant organization. Although the IT depart- ment may manage considerably more aspects and issues, the following are a few of the key installation and connectivity issues that the PMO may wish to know about and perhaps influence:

◾ System or tool operating system configuration ◾ Electronic data interchange requirements and configuration ◾ Application software and resulting file residence locations on networks ◾ User application and file access and control requirements and configuration ◾ Computing device interface requirements and configuration (PDAs, mobile

phones, dial-up modems, etc.)

Once necessary coordination has been accomplished, the PMO should rely on the IT department to fulfill system installation and connectivity requirements.

Perform Function and Feature Customization

The PMO, in ongoing coordination with the IT department, will need to determine what system or tool customization and buildup should be accomplished and who

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will perform that work: the system vendor, the IT department, or resources within the project management environment. Planning in this area usually addresses cus- tomization that aligns the system with current processes and practices. However, it may also include customization that affects the capability for system intercon- nectivity. Normally, the IT department will lead or perform operating system and connectivity configuration, as described above, while the PMO will lead or perform most software application function and feature customization.

Three particular knowledge management system and tool customization activi- ties should be examined, planned, and implemented, as discussed in the following sections.

Conduct General Software Customization

The PMO should determine the extent of customization required to make each new knowledge management system or automated tool ready for use in the project management environment. It should consider software configuration needs in the following areas:

◾ User log-on and access (i.e., administrative, group, and individual users) ◾ Peripheral equipment and locations for data output (e.g., printers, storage, etc.) ◾ General screen appearance (i.e., colors, screen display size, font size, etc.) ◾ Alerts and alarms for embedded threshold indicators ◾ Options for individual user personalization

The PMO may determine the need for other software customization as it pro- ceeds through learning the functions and features of the system or tool that can be incorporated into the customization effort as deemed necessary by the PMO.

Conduct Information Handling Customization

The PMO should determine what project and project management information customization is needed and how such data are to be aligned relative to connectiv- ity with other systems, and then revise, refine, or develop user processes and con- figure system and tool features to achieve information handling requirements. It should consider information handling customization needs in the following areas.

◾ Project information: Preparation and configuration of cost, schedule, and resource utilization information; often including graphical depictions of project timelines and resource matrices, specification of project reporting features, as well as development of executive dashboard and program-level screen depictions

◾ Project management information: Preparation and configuration of informa- tion pertaining to activities performed across the project management life

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cycle; often includes development and configuration of project manager checklists, templates, and tracking forms to facilitate management oversight and approval actions, or possible configuration and display of the prescribed project management methodology components—processes, practices, and tools

◾ Project portfolio information: Preparation and configuration of information required for decisions and deliberation related to project selection, continua- tion, and termination as well as project prioritization; often includes configu- ration of online access to business case information and current project status

◾ Project collaboration: Preparation and configuration of online capability for interactions among project team members and other relevant stakeholders within the project management environment; often includes configuration of task assignment and progress reporting, time management, and communica- tion and discussion features

◾ Project reference information: Preparation and configuration of online access to project and business documentation (plans, policies, etc.), project manage- ment archives and library services, and internal and external project manage- ment information services

The PMO will have to determine the types of depictions, information content, and user input that can be created on the new system or tool to achieve the desired process efficiency, and then implement them through software configuration or development of user interfaces.

Conduct System User Interface Customization

The PMO will need to plan how users will access and use knowledge management systems and tools. This may include a range of considerations, from simply using the functions and features as delivered to developing modified user screens, to cre- ating new system or tool user interfaces.

The PMO should plan and conduct system user interface customization activi- ties, considering customization needs in the following areas.

◾ Screen design: Provides the design for standard information content displays and screen appearances in a logical and relevant manner for user access

◾ Automated screen content generation: Provides automated data calculations, introduction of new and cross-referenced information from dynamically linked databases, and display of management and reporting templates on content screens

◾ Search-engine criteria specification: Provides the criteria needed to conduct automated searches on the Internet for content and the transfer of any acquired information content to the project management information library (database)

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◾ User access levels: Provides access level definitions for the various types or categories of system users and administers security/password features of the system

◾ User personalization: Specifies the options for individual users to customize screens, reports, and screen content according to personal preferences or needs

◾ User help screens: Modifies existing system or tool help features to contain information of value to established users

The PMO can facilitate the design and development of these user interface fea- tures to optimize system and tool capabilities and maximize their benefits for users.

Introduce Project Knowledge Management Content

The capability and configuration of the total project knowledge management sys- tem will guide content management. However, the PMO will want to prescribe how all systems will capture, store, and organize relevant information. For each knowledge management framework component, it should plan and implement content-handling attributes in the areas outlined below.

Content Capture

This element specifies the means by which information is introduced into the proj- ect knowledge management system. To a large extent, project management data and information captures will be a manual-entry process. The project manager, team member, or designated project administrator will enter data and information into the system when they become known or at specified recurring time frames. Automated calculations or electronic data transfers from other systems may gener- ate some content as well. As a result, the PMO should specify the source of required knowledge management input across systems or tools, particularly if it will reduce or eliminate any requirements for manual data entry. Any requirements for manual data entry must be conveyed to system or tool users.

Content Storage

This content management element specifies where the data or information resides. This may be a moot point if the project knowledge management system is totally automated and requires no manual database or storage setup or access outside of IT department management. However, defining this element becomes more essential when users of the knowledge management system create electronic files and docu- ments and have the associated responsibility for addressing their storage locations. The PMO should identify preferred databases and other electronic file storage loca- tions and then convey the electronic or online system storage addresses to system users.

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Content Organization

This element of content management addresses the relationships between and among knowledge management data elements. It provides for examination of data and information to ensure time relevance and content compatibility. Time rele- vance means making sure that two or more data elements used in calculations, pre- sented in reports, or introduced into discussions and deliberations are of the same time period and, therefore, relevant to one another. Content compatibility means verifying that each data element used, particularly those retrieved from connected systems, is what it is supposed to be. To illustrate this latter point, one knowledge management system component may access a data element from a connected sys- tem that uses a data field identifier called “Project ID.” For a given value of “Project ID,” that data field identifier must refer to the same project in all systems. The PMO must be reasonably assured that all data and information are checked and properly organized for time relevance and content compatibility as they are intro- duced into project knowledge management system components.

Implement Knowledge Management System The specific features of the project knowledge management system will be designed and implemented based on the PMO’s deliberation and decisions that define the knowledge management framework for the relevant organization. The PMO can consider the following guidance for implementing project knowledge management system components.

Develop PMIS

The PMIS represents the fundamental capabilities of information capture and exchange within the project management environment. It is the traditional term and approach applied to project data and information handling but is now broader as a result of expanded project manager business responsibilities and the use of automated tools to maintain data and information for readily available use. As such, it retains high importance within the context of this PMO “project knowl- edge management” function model.

The PMO can consider the following PMIS content components to ensure effective communication and achievement of objectives within the project manage- ment environment.

Project Plan

The content and makeup of the “project plan” varies from organization to organi- zation and across industries. For purposes of establishing a foundation concept, a comprehensive “project plan” could include the following components.

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◾ Project requirements documents: Documents that identify the customer’s needs and describe the requirements for project performance, to include such items as

− Statements of work − Requests for proposals (RFPs) − Technical specifications − Business specifications − Surveys and analyses − Workshops (for design and collaboration) − Interviews (for needs and specifications clarification)

◾ Project business plan: The document that defines the project and guides the business aspects of project management, to include such items as

− Project definition (project objectives and scope) − Technical solution − Project business case − Business solution − Project charter

◾ Project work plan: An essential instrument of project management that speci- fies all project work activities (including milestones) and aligns factors of cost, schedule, and resource utilization to each planned work element. The follow- ing are generally accepted as key components of the project work plan.

− WBS: A specification and decomposition of project work activities, nor- mally to the work package level—the lowest level of work decomposi- tion, where work element cost, work duration, and resources required to accomplish the work are assigned

− Cost: A specification of the estimated cost to be incurred for each work package or other work element in the WBS

− Schedule: A specification of the estimated time duration to be expected, per work element relationships that are established, to complete each work package or other work element in the WBS

− Resource utilization: A specification of resources, usually by name or type, which are needed to accomplish each work package or other work element in the WBS

It is important to distinguish the project work plan as an element or component of the overall project plan, and not as being the project plan itself. The project work plan is used to guide the project work that is performed, and it is a very essential tool for the project manager. However, it is just one of the several documents that are components of the larger collection of project management documents known as the “project plan.”

◾ Primary project management plans: Documents that are prepared to expand on concepts and provide routine (and often standardized) project manage- ment guidance. Recommended primary project management plans are listed for PMO consideration in a separate subsection below.

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◾ Project support plans: Documents that are prepared to expand project man- agement guidance, as needed, with regard to organizational policies, achieve- ment of business objectives, industry practices, project complexity and risk factors, and the experience level of the project team. Recommended project support plans are listed for PMO consideration in a separate subsection below.

◾ Technical plans and documentation: Documents that provide technical specifi- cations and that are used to guide technical design, development, and deploy- ment activities; these items can be closely related and in some cases may even be the same elements contained in the project requirements documentation. Technical plans and documentation are included for PMO consideration in the list of project support plans below.

Primary Project Management Plans

Primary project management plans are the core documents of the project manage- ment plan. They provide essential concepts and guidance for managing the proj- ect. These primary plans should contain more detail as the projects they support become more complex. However, they are essential components of project manage- ment, and therefore, primary project management plans should be developed for use in every project conducted by the organization.

It is important for the organization to recognize a standard set of component documents that are used to guide project management activities, as prescribed by the set of primary project management plans that are described below. However, the organization should also review its need for these plans and then either con- firm their use or adjust and specify another set of primary project management plans that are used for every project. The content and level of detail of primary project management plans may vary according to project size, value, and duration, but their purpose is generally applicable to all projects conducted by the relevant organization.

The following list presents six primary project management plans that are pre- scribed for use by all project managers across all projects conducted in the relevant organization.

◾ Risk management plan: This plan specifies the activities for managing risk throughout the project management life cycle. It identifies the project team members and other stakeholders responsible for managing various types of project risk, and it compiles the identified project risk events and response strategies established through a project risk assessment and other ongoing efforts to identify and manage risks.

◾ Communications management plan: This plan describes the methods for gathering, distributing, and storing various types of project information. In particular, it specifies the content, format, and frequency of required and

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optional project reports. It also identifies and possibly presents a schedule for project meetings. If not created as a separate plan, it can specify project docu- ment requirements and control procedures.

This plan also identifies all project stakeholders and, to the extent possible, specifies their roles and responsibilities, as well as their physical locations and various means of contact. As well, this plan indicates the protocol for project communication—what are the preferred and authorized interactions and communications among project team members, senior management, the customer, vendors and contractors, and other project stakeholders.

Finally, this plan can include instructions for identifying problems and escalating project issues to the project manager, the PMO, and senior management.

◾ Change management plan: This plan describes the management and control of project scope. It particularly includes specification of the preferred change management process as an integral component of scope management. It also specifies individual responsibility for managing scope, and it specifies “dos and don’ts” for project team members as guidance for avoiding unintentional modifications to the work effort that represent scope changes. This plan can contain a checklist for evaluating indicators of drifting scope.

Note: In some organizations, a scope management plan may be used in lieu of or is regarded to be the same as the change management plan, as managing change is the focus of this planning effort.

◾ Quality management plan: This plan describes how the project team will implement its quality policy and practices on the current project. It includes the identification of quality requirements for direct and indirect project deliv- erables, specifies the technical reviews and threshold values of quality control, and identifies the quality assurance activities to be accomplished as a matter of ensuring successful technical performance.

It also can identify scheduled and ad hoc technical and project manage- ment audits that may be conducted as a part of the project oversight effort. It can reference applicable technical standards and specification documents and adjunct technical plans having greater quality process and procedural details. When possible, it can identify individuals and organizations responsible for quality management.

Finally, the quality management plan should specify the procedures and criteria for customer acceptance of project deliverables.

◾ Vendor/contractor management plan: This plan describes how external resources will be integrated into the project effort. This includes specification of their primary point of contact and key roles and responsibilities that will be fulfilled. If not otherwise provided in a separate support plan, the procure- ment process for vendor and contractor acquisition can be incorporated into this plan.

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This plan also can reference and highlight key information elements for each vendor/contractor agreement or contract. In particular, this plan will specify the deliverables to be accomplished by the vendor/contractor, the methods that will be used to accept vendor and contractor deliverables, and the process for receiving and approving invoices associated with vendor/con- tractor deliverables.

Finally, this plan should prescribe the management activities that will be accomplished to ensure effective and timely vendor and contractor perfor- mance in the project.

◾ Staffing management plan: This plan describes the project resources needed, allocated, and assigned to the project effort. The plan is constructed to help the project manager and technical team leaders identify the number and type of resources needed to accomplish the project effort; when, how, and from where they will be sourced; and what steps will be taken to manage their timely acquisition and assignment. It frequently contains a project resource responsibility matrix to show alignment of individuals with project work responsibilities.

This plan may reiterate the location and methods of contact for each proj- ect team member. As well, a portion of the plan should specify how the project team and individual team members will be dispersed following completion of their assigned duties.

Project Support Plans

Project support plans are the adjunct documents of the project management plan. They provide many essential concepts and guidance for managing all aspects of the project. These “adjunct” plans should be used to satisfy the technical and business aspects of project management, and they too will become more detailed as the projects they support become more complex. As well, larger, more complex projects may warrant the use of additional project support plans beyond those required by smaller projects.

The following list presents a variety of project support plans that can be pre- scribed or otherwise considered for use at the discretion of the project manager or per the nature of technical work, business requirements, or skill and experience of the project team on each project.

◾ Auditing plan: Specifies the scheduled and unscheduled technical, business, and project management reviews to be conducted; may be an extension of or included in the quality management plan.

◾ Budget plan: Presents the company, division, or relevant organizational unit annual budget for consideration relative to the current project and project planning effort.

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◾ Business case plan: Specifies the analysis and presentation of business assess- ment results that provide the justification to pursue the project opportunity.

◾ Configuration management plan: Describes the procedures used to apply tech- nical and administrative direction and oversight to identify, document, and control application of the functional and physical characteristics of any deliv- erable item or system.

◾ Cost management plan: Presents the procedures for tracking and managing cost variance and provides guidance for general oversight of the project bud- get, including management of cost changes.

◾ Construction plan: Provides information for coordinating, communicating, and directing the construction of a capital facility in terms of scope, quality, time, and cost.

◾ Contingency plan: Identifies alternative strategies to be used if any specified risk events occur; this plan may be an extension of or included as a part of the project’s risk management plan.

◾ Customer relationship management plan: Specifies the steps to be taken to manage customer expectations and involvement in the project effort.

◾ Customer support plan: Describes the activities designed to assist the customer with a product or service after acceptance (sometimes called a maintenance plan).

◾ Documentation plan: Specifies the design, development, storage, and disposal of reports, correspondence, information, records, logs, references, and other project data and technical documents; this plan may be an extension of or included as a part of the project communications management plan.

◾ Engineering design plan: Describes the project deliverable(s) in the form of specifications, drawings, data flow diagrams, or any other methods that can be used to provide detailed information on how to build the product.

◾ Equipment management plan: Prescribes how any major equipment and mate- rial used in a project will be acquired, managed for efficient use, and disposed of at the conclusion of the project.

◾ Estimating plan: Specifies the information required and the steps necessary for conducting an effective estimate of the related elements of cost, schedule, and resource utilization. This can be an extension of or included with the project work plan.

◾ Facilities management plan: Designates the facilities that will be used to sup- port project work, provide staffing locations, and serve related project facility needs. It will prescribe the actions and responsibilities associated with acquir- ing, managing and maintaining project facilities. It will provide guidance for vacating, returning, transferring ownership or use, or otherwise disposing of facilities at the conclusion of the project.

◾ Financial performance plan: Stipulates business unit performance goals for a given financial period (or a given project).

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◾ Health and safety plan: Outlines the performance standards and requirements designed to protect project team members.

◾ Inspection plan: Presents the design for the examination or measurement of work to verify whether an item or activity conforms to specific requirements.

◾ Inventory management plan: Presents the design for the use and control of materials required to execute the project.

◾ Logistics support plan: Presents the design, approach, and procedures for the acquisition and movement of materials and personnel required to conduct the project.

◾ Make-or-buy plan: Explains the procedures for analyzing whether a particular product or service can be produced or performed cost-effectively by the per- forming organization or should be contracted out to another organization.

◾ Manufacturing plan: Provides the scheme for building the product or deliver- able resulting from the project effort.

◾ Materials procurement plan: Describes sourcing of raw or prefabricated mate- rials to support execution of the project.

◾ Operations plan: Defines interface roles and responsibilities between the proj- ect team and the relevant organization’s business units.

◾ Peer review plan: Structures the content and method of peer technical reviews of the deliverable product.

◾ Portfolio management plan: Identifies pending and approved products of the relevant organization; defines the prioritization of approved products and projects and the current project.

◾ Procurement management plan: Describes management of the procurement processes, from solicitation planning through contract closeout.

◾ Product life cycle plan: Defines how the technical product will be created and evolve into a new offering and how it will be maintained during its “life.”

◾ Project organization plan: Defines the management structure for the project and how it interfaces with the relevant organization; this may be an extension of or included in either the project charter or the project staff management plan.

◾ Regulatory compliance plan: Explains how the work of the project will be man- aged to conform to applicable government regulations or industry standards.

◾ Resource utilization management plan: Presents the procedures for tracking and managing resource utilization variance and provides guidance for how to measure and manage project team member assignments and performance.

◾ Schedule management plan: Presents the procedures for tracking and man- aging schedule variance and provides guidance for general oversight of the project schedule, including management of schedule changes.

◾ Staff training plan: Specifies training to be undertaken by designated or potential project team members so that they may achieve qualification of project skill, knowledge, and competency requirements.

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◾ Staff transition plan: Addresses staff replacement issues and migration from the project to other assignments in the organization; this may be a part of or an extension to the project staff management plan.

◾ Strategic business plan: Sets the organizational business direction and context for decision making in the development and execution of the project.

◾ Systems integration test plan: Defines operating requirements and standards for combined elements of a system or the system as a whole.

◾ Technical plan: Describes how the scope and deliverables of the project will be achieved from the perspective of the technical or professional work to be performed.

◾ Testing plan: Defines the method and criteria for checking the conformance to requirements of the deliverable product or its components.

◾ Tooling plan: Provides the design for manufacturing equipment used to pro- duce product components.

◾ Transportation plan: Defines how the product will be transported through distribution channels to reach the customer’s points of product acceptance.

◾ Verification plan: Provides for the evaluation of the correctness of the project output (deliverable) for various stages of product development based on the criteria for that stage.

◾ Warranty and field support plan: Provides for replacement and repair of parts and extended services associated with product delivery.

An attempt was made to present items in the preceding list with generic titles, as a means to offer the PMO a perspective in what can be accomplished relative to project planning. Undoubtedly, there are numerous technical and business plan- ning components that are unique to industries and organizations that are not listed here. The organization should identify those requirements and create the preferred format and content guidance for inclusion in the planning process.

Project Reports

The PMO should design and implement the means to prepare and access project reports, which includes the following general types

◾ Project progress or tasking reports: Normally prepared by project team mem- bers to indicate progress in accomplishing assigned project tasks, with distri- bution to the project manager

◾ Project status reports: Commonly prepared by project managers to indicate the current project status relative to planned cost, schedule, and resource utiliza- tion; to identify problems, issues, and their resolution; to specify deliverables and achievement of project objectives; to confirm contract compliance or note contract modifications; and to address accomplishment of business objectives; with distribution to the project sponsor, executive control board, and the PMO

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◾ Project portfolio reports: Customarily prepared by the PMO and containing aggregate results or indicators of project performance, business case fulfill- ment, and recommendations for project continuation or alternative actions (such as project audits, temporary hold, termination); with distribution to the executive control board

◾ Project audit reports: Usually prepared by the lead auditor (which is some- times the project manager) to present the findings and recommendations of a project or technical audit; with distribution to the project sponsor and the PMO, as well as to other project stakeholders as deemed appropriate

Project Management Documents

The PMO should design and implement the means to prepare and access proj- ect management documents, if not already included elsewhere. This includes the following

◾ Project charter: Specification of project management authority, funding allow- ance, and authorization to proceed with project management and technical life cycle activities. This document may be incorporated as an element of the project business plan, as deemed appropriate within the relevant organization.

◾ Scope change management documentation: Management of project scope change requests, change request reviews and analyses, scope change approval, and change notice actions.

◾ Project issues log: Identification and resolution management of project cus- tomer, project sponsor, and project team issues; may include the consider- ation and documentation of problem management.

◾ Contact log: Identification and management of important project stakeholder contacts.

◾ Actions log: Identification and management of critical project or technical activities (including postmeeting action management) that are not otherwise covered in project planning documents.

Meetings and Collaborative Events

The PMO should design and implement the means to prepare and access informa- tion and documents concerning project meetings and similar collaborative events (for example, technical reviews, performance reviews, technical solution discus- sions, etc.), which include the following:

◾ Meeting agenda preparation (purpose and topic pursuits) ◾ Meeting facility arrangements (rooms, location, equipment, meals, as needed)

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◾ Meeting scheduling (date, time, location, and method, such as in person, online, via phone)

◾ Meeting participant notification (and participant acknowledgement) ◾ Meeting actions and follow-up responsibility tracking

This meetings and collaboration element can also be considered relative to the subsequent discussion of online collaboration, if the online approach becomes a prevalent meeting method.

Develop Executive Dashboard

The executive dashboard can be viewed as a condensed and graphical representa- tion of the project status report in real time. Its name corresponds to instruments on an automobile’s dashboard panel, which may vary from graduated dials to dis- plays of specific values. Despite the naming convention, executives are not the only project stakeholders who can benefit from accessing such information. However, the project information needs of the executive are usually the primary factors in the design and development of the executive dashboard.

The PMO should identify the requirements and construct an executive dash- board solution that provides appropriate project information to prominent users. The PMO can consider the following sample information elements in designing and developing an executive dashboard capability that serves project executives and stakeholders in the relevant organization:

◾ Primary dashboard indicators ◾ Project status

− Green indicator: Project is proceeding according to plans − Yellow indicator: Project has some variation, but it falls within allowable

tolerances − Red indicator: Project has some critical variations from plans

◾ Project milestones − Identified milestone − Milestone achievement status (completed/not completed)

◾ Project deliverables − Identified deliverable − Deliverable achievement status (delivered/not delivered)

◾ Secondary dashboard indicators ◾ Project performance management

− Cost earned value indicators (planned, actual, variation) − Schedule earned value indicators (planned, actual, variation) − Resource utilization (planned, actual, variation)

◾ Project risk management performance − Risk events (for past project periods to date, perhaps by life cycle phase)

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− Risk response implementation (yes/no) − Risk control effectiveness (percentage of impact reduction)

◾ Project issues management − Issue type (per such categories as customer, project team, vendor/contrac-

tor, etc.) − Issue description statement − Issue resolution statement − Issue status (open/closed)

◾ Customer invoice status − Invoices submitted (invoice ID, date, amount, deliverable) − Invoice amounts paid (invoice ID, date, amount, deliverable)

This sample listing represents a few common executive dashboard content ele- ments. The PMO can decide which of these or other information elements are needed for the dashboard it will implement in the relevant organization. In that regard, the dashboard should contain sufficient information to give users an ade- quate high-level perspective of project status and its performance. It should also provide links to more detailed project information according to individual user needs. For example, the dashboard can be prepared as an automatically refreshed Web page or an otherwise predefined data display scheme that the deployed knowl- edge management system provides.

Construct Project Management Library

The project management library is an online reference tool that virtually all stake- holders in the project management environment can use. Although selected content may warrant access control, a large part of this project knowledge management component should be accessible to project managers, project sponsors, and project team members.

The PMO can use the inherent capabilities of the PMIS and supplement them as necessary with other knowledge management system components to provide a complete and comprehensive project management library facility that contains information elements like those described below.

◾ Project lessons learned: Information and recommendations from previously completed projects that can be applied to current project planning efforts. For easy reference, lessons learned can be captured and organized into the following categories.

− Customer feedback − Project manager feedback − Project team feedback − Vendor/contractor feedback − Project cost, schedule, and resource estimating results

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− Technical and technology feedback − Executive feedback and guidance

◾ Project archives: A repository for project management plans and technical documents that can support postproject analyses and studies, provide reus- able technical and project management solutions, and enable review of project management and technical process effectiveness. Project archives also can be aligned with the project team knowledge spaces described in the next section.

◾ Policy guidance: A reference to applicable policy and governance information that has application in the project management environment. This may com- prise policies that direct the use of project management and technical meth- odologies, tools and practices, standard business objectives for every project, and industry and government regulatory guidance and mandates.

◾ Industry news: A reference to current news articles and publication content that deals with pertinent business, technical, and project management topics. This can be managed as a collection of industry-relevant news and informa- tion that either is captured and stored for later network database access by users or is represented by links to specified Web pages that are compiled and categorized for subsequent user access via the Internet. This information col- lection effort can include automated and manual information searches based on relevant key words, as well as monitoring and participating in online busi- ness, technical, and project management forums, chat rooms, Internet infor- mation feeds, or Webinars.

◾ Papers and presentations: An online repository for relevant internal and exter- nal technical papers and presentations dealing with business, technical, and project management topics. Information that is submitted at professional con- ferences and conventions or obtained from those sources or individuals can be categorized and stored for access in the project management environment.

◾ Project audits database: An online repository of the different project and proj- ect management audits that the project manager, PMO, or third parties con- duct. In general, this is essentially a document repository, but some PMOs may want to construct a more rigorous audit quantification system that provides a more detailed automated analysis capability. The project audits database will necessarily have restricted user access and can be used for sub- sequent internal studies concerning the project management environment.

Implement Online Project Collaboration

The PMO can maximize collaboration in the project management environment by implementing knowledge management tools. In the context of this PMO func- tion, collaboration means enabling project team members and other stakeholders to communicate and exchange information that helps to achieve project objectives.

The PMO can use three prominent tools to facilitate project team collaboration, discussed below.

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Project Team Knowledge Spaces

This is an online information center—often represented in Web-page format—that is established for every major project. However, other configurations can also be used. For example, the project manager, cohesive project teams working multiple projects, and even business units can set up team spaces. Possible content for such knowledge spaces includes

◾ Project charter ◾ Project definition and other descriptive information ◾ Project status information ◾ Project logbooks ◾ Project reports ◾ Participant contact list (telephone, location, e-mail address, etc.) ◾ Customer information, including links to customer Web sites ◾ Vendor/contractor information, including links to vendor/contractor Web

sites ◾ Links to relevant industry news and information Web sites ◾ Links to project plans and technical documentation (see the subsection

“Product Review and Handover Spaces,” below) ◾ Links to relevant project management information portals ◾ Links for project management methodology access (such as process and prac-

tice guidance, as well as forms, checklists, templates, etc.) ◾ A dedicated project team chat room to chronicle project management and

technical discussions pertaining to the project (see also the subsection, “General Discussion Rooms,” below.)

The project team knowledge space is an online location that provides quick and easy access to project information that the project team and other stakeholders require. This tool’s Web-based nature makes it accessible to geographically dis- persed project team members.

Product Review and Handover Spaces

This is an online repository of project and technical documentation that authorized individuals can access. Represented by online work spaces where project and proj- ect management deliverables are created and stored, it can be used to

◾ Store and access project plans, including retrieval for review and approval ◾ Store and access technical documents, with particular emphasis on retrieval

and use of documents by different project team members (possibly at differ- ent geographical locations) for iterative design and development of project deliverables

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◾ Store and access project deliverable electronic files and documents for quality review and approval, both internally and by customers

◾ Store and access vendor/contractor electronic file and document deliverables ◾ Provide simple or extensive feedback from technical and management reviews,

as well as next-step guidance for iterative design and development activities ◾ Facilitate access to iterative deliverables for use in concurrent engineering of

other project deliverables ◾ The product review and handover space can be used to convey any deliv-

erable design and development documentation that project team members need, including access to actual project deliverables that are constructed in electronic formats

General Discussion Rooms

This is an online collaboration feature that traverses the project management envi- ronment. It can be developed for a wide audience, like all stakeholders within the project management environment, or for a specified user group, such as all project managers. It presents a capability for ongoing exchange of knowledge and infor- mation about project management, which can be conveyed in formats such as live online chat and threaded topic forums. One or more online discussion rooms can be developed to provide such capabilities as

◾ Forum for exchanging project manager knowledge and information ◾ Online project management mentoring through an “ask the expert” forum ◾ Forum for discussing new techniques and emerging technologies ◾ Real-time distribution of lessons learned ◾ Forum for organizational news and announcements about current and new

projects

The introduction of general discussion rooms emphasizes a cross-project and cross–business unit collaboration capability within the relevant organization.

Implement Other Knowledge Management Tools

This PMO “project knowledge management” function generally retains the tradi- tional considerations of strong project communication while presenting a relatively new focus on intensive collaboration or interaction through the use of automated systems and tools. To that end, this PMO function model does not presume to pro- vide a comprehensive examination of emerging knowledge management concepts and practices. However, there are a few more knowledge management tools and considerations that the advanced PMO may want to consider in its evolution. The list below briefly describes a few.

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◾ Project management methodology system access: Provides interconnectivity between knowledge sources and the processes and practices of the preferred project management methodology system

◾ Customer information knowledge spaces: Provides capability for customers to have their own Web page on the relevant organization’s knowledge manage- ment system as a means to access information (such as project status, reports, and deliverables) relative to the customer project being conducted and pos- sibly including an interactive communication capability, together with con- tract and invoice information

◾ Vendor/contractor knowledge spaces: Provides capability for preferred vendors and contractors to have their own Web page on the relevant organization’s knowledge management system as a means to access relevant project informa- tion, as well as to provide information about their participation and progress

◾ Project portfolio management system access: Provides interconnectivity between knowledge sources and the processes and practices of the preferred project portfolio management system

Postscript for the Smaller PMo The smaller PMO has a somewhat equal advantage in implementing the knowl- edge management function. In terms of cost and capability, the smaller PMO can normally compete with its larger counterparts in providing comparable knowledge management tools and practices to satisfy the needs of its relevant organization. This equality is based on the consideration that every project management environ- ment requires some level of communication and collaboration, and each organiza- tion commits some level of cost and effort to achieve the capability it needs.

There are three fundamental project knowledge management capabilities that the smaller PMO should consider to provide adequate communication and collabo- ration capability within the project management environment:

◾ Identify and implement one standard PMIS—one that (1) facilitates input from the project manager and project team members while providing them with access to important project management information and (2) provides senior management access to project information needed for business deci- sions. This is established as much by the processes that are implemented as it is by the automated systems or tools that are used. Therefore, it is readily facilitated through project management methodology implementation.

◾ Acquire and install an efficient (network- or Web-based) project team and project stakeholder collaboration tool, if not already integrated as a feature of the PMIS. Project managers need to communicate with project team members, vendors and contractors, the project sponsor, customers, and rel- evant executives, and project team members need to communicate with one

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another. However, they all not only need to communicate; they also need to collaborate and exchange their concepts, ideas, and knowledge. Thus, this tool becomes a particularly critical need for geographically dispersed or vir- tual project team members.

◾ Establish a basic project management archive capability. It is imperative that lessons learned be captured from each project conducted and be made avail- able for review and consideration when planning similar, subsequent projects. It is additionally important to have a reference to how well project manage- ment plans have performed in order to adjust planning on future projects. The PMO should determine the best way to collect and retain this informa- tion as a part of the automated knowledge management system it constructs.

The smaller PMO will do well to facilitate appropriate levels of contact among participants within the project management environment by ensuring that they have the necessary knowledge management tools that effectively accomplish com- munication and collaboration objectives according to established processes.

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Chapter 5

Project Governance

The project management office (PMO) is responsible for ensuring that the preferred business practices of the relevant organization are properly conveyed for use within the project management environment. The “project governance” function provides the authority and guidance necessary to enable the PMO and other project stake- holders to pursue project management objectives in a manner that is consistent with business interests and operating standards. It also provides for the ongoing examination of how well authority and guidance are being applied within the proj- ect management environment, where the PMO serves the dual roles of examiner and examinee.

This “project governance” function enables the PMO to

◾ Establish its authority to develop, implement, and manage project man- agement practices and associated business interests within the relevant organization

◾ Introduce and manage organizational and business standards, policies, and directives within the project management environment

◾ Confer authority and responsibility for project performance to project managers ◾ Facilitate executive and senior management involvement in project management ◾ Convene management and technical advisory boards, councils, and commit-

tees to collaborate on decisions and provide guidance relevant to the project management environment

The PMO ensures that project management and PMO functions are conducted within accepted boundaries of established business practices and guidance. At the same time, it translates business requirements and develops methods for conduct- ing business within the project management environment. Furthermore, it can also

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contribute project management practices to influence how business objectives are achieved outside the project management environment. This is the two-way nature of the PMO’s “project governance” function.

Project environment interface Concepts The PMO should be the centrally recognized authority for project management within the relevant organization. This centralization provides for consistent leader- ship and management across all projects, in contrast to each project being an inde- pendent work effort accomplished as dictated by individual or departmental interests and priorities. The PMO provides the common level of project management oversight and control that spans all projects. Recognition of the PMO as a central author- ity facilitates a consistent and repeatable approach to project management based on preferred standards and practices; translation and integration of business interests from a single and reliable source; technical guidance for achieving accuracy in project planning, tracking, and forecasting; and aggregation of project performance results for timely management review.

The PMO presents project management and project manager information and interests to senior management. It has a primary role to interface with executive and senior managers not only to convey project performance results but also to identify the needs of the project management environment that will make it more tech- nically viable, more professionally competitive, and more aligned with advance- ments in the project management discipline. The PMO’s authority coincides with its responsibility to keep senior management informed about the state of capability within the project management environment.

The PMO’s “project governance” function prominently includes efforts to work with executives and senior managers to solicit and implement their guidance regarding oversight and control of project performance and project management activities. This is generally accomplished through mutual participation on advisory boards and in decision-making forums. This is the PMO’s direct interface with business managers at all levels in the relevant organization. It is the primary means to identify, consolidate, and translate organizational business decisions into actions or directives requiring implementation in the project management environment.

The PMO also is ideally situated to develop, guide, and possibly manage the distribution of authority given to project managers. More specifically, the PMO can pursue expansion of project manager authority levels promoted by concepts of modern project management. It can assist in defining the qualifications asso- ciated with increasing levels of authority and then collaborate with functional managers to identify individuals demonstrating skill, knowledge, and experience aligned with those qualifications. The PMO also can coordinate with project sponsors to assist them in developing project charters that specify authority for

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each project undertaken. Some PMOs may take on the responsibility for issuing project charters.

Of course, the PMO also needs a charter to conduct its business. This PMO function facilitates the creation of a PMO charter along with its coordination and approval at the executive level.

Business environment interface Concepts The PMO’s “project governance” function demonstrates to business units across the relevant organization that they retain control and influence over their business objectives and interests. To a large extent, it may even provide the means for busi- ness managers to expand their control and influence into the project management environment to ensure that business interests are being achieved. Two primary types of governance are recommended to provide this interface between business managers and the PMO.

The first type of governance is that provided by an executive control board. This board comprises representatives of senior management within the relevant organization. For enterprise-level PMOs, this board would ideally include the chief executive officer (CEO). This board, or possibly a single executive on the board, is the senior manager responsible for the PMO’s performance and serves as the approval authority for the PMO’s charter. The head of the PMO will nor- mally report to this board or, more specifically, to a designated executive on this board. This business alignment and oversight at the executive level ensures that all important business interests and objectives are conveyed and implemented within the project management environment. If project portfolio management has been introduced, this executive control board would be the guiding body for its implementation. To that end, board composition would be the CEO and executives who hold responsibility or otherwise influence project portfolio management.

The second type of governance needed may include one or more technical or business advisory committees. In some cases, these technical-based and business interest groups already exist within the relevant organization and can be used intact. For example, the PMO may be tasked to introduce a business standard for which an oversight committee has already been established. It can either call on this com- mittee simply to provide established guidance or determine whether committee participation is desirable and feasible and seek to provide PMO representation on the committee. In other cases, the PMO may seek specialized guidance from busi- ness managers, project managers, or technical managers (or some combination of these) to achieve a particular objective. In this case, the PMO would convene the necessary committee to review, guide, and advise on technical and business matters applicable to the project management environment.

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Project Governance Activities across the PMo Continuum The “project governance” function along the PMO competency continuum is initially characterized by activities that establish the PMO as a business activ- ity having central authority and responsibility for project management across the relevant organization. This includes an acknowledgement of accountabil- ity to higher authority throughout the advancing stages of PMO development. However, it also illustrates progressively independent authority to “govern” in the project management environment without being burdensome to executives and senior managers.

Table 5.1 presents an overview of the range of prescribed PMO project gover- nance activities according to each level in the PMO competency continuum.

The project office, in the form of the project manager, is the first line of authority for project management. The project charter is the instrument that conveys the necessary authority to manage project work. It also is the instru- ment that can specify what information or feedback is required from the project manager to the PMO and, ultimately, to the responsible executive or executive control board.

Midrange PMO levels have the responsibility of introducing the capability and asserting appropriate authority within the project management environment to manage oversight, control, and support. In particular, the midrange PMO is responsible for using its authority to implement the business and technical poli- cies and guidance deliberated and decided on by executives and senior managers who have vested interests in project performance. Throughout this level of PMO operations, the PMO will play an influential role in developing and recommend- ing project management policies and guidance for senior management review and approval. The PMO may evolve to hold its own authority to prescribe policy and guidance without excessive senior management review, although it contin- ues its close collaboration with senior management representatives from business units.

The center of excellence takes on a business unit–type approach to project gov- ernance. It is concerned with oversight and the delegation of authority within the project management environment, but with a distinct cross-functional business interest and perspective. It will look at what authority different participants need and how that authority can be placed at the appropriate level of management to maximize effectiveness for all business operations.

The PMO’s “project governance” function undoubtedly will be established con- sistent with the existing culture and distribution of authority that exists within the relevant organization. That considered, it remains only to be said that the PMO, at whatever stage it is introduced, must have sufficient authority to influence the activities of the project management environment and to undertake and achieve the business objectives for which it was created.

Project Governance  ◾  141

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Project Governance Function Model The PMO’s “project governance” function model presents the means to define and construct a viable, if not a superb, project management capability within the rel- evant organization. It does this through authority granted and supported by senior management. It also requires a moderate amount of ongoing senior management involvement at critical junctures in the PMO’s efforts to implement an effective and professional project management capability. As the PMO demonstrates its own capability and success, the early reliance on senior management decisions and approvals can be somewhat reduced, but it will never be eliminated. In project governance, the PMO is the extension of executive and senior manager author- ity within the project management environment. That necessitates ongoing PMO coordination and collaboration at the executive and senior management levels across the relevant organization.

The prominent activities of the PMO’s “project governance” function model are depicted in Figure 5.1. Each activity is described in the following subsections.

Prepare and Maintain PMO Charter The PMO is created to oversee, control, and support the project management capability of the relevant organization. It is normally designed relative to the existing business and cultural norms of the organization. Some PMOs may vary from those norms, and in such cases, it may require a concerted effort to introduce and manage the required organizational changes. Whatever the conditions, the PMO should pursue its mission based on a PMO charter that is documented and approved at the highest management level within the relevant organization.

The PMO charter is a “living document” that can be updated and adapted to organizational changes, growth of the project management environment, or PMO expansion as a business unit. As a document, the PMO charter should be no more than a few written pages in length. A two- to three-page PMO charter document should be sufficient to present all of the credentials and guidance that will be needed.

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◾ Describe its purpose relative to the achievement of business objectives ◾ Show its organizational alignment with other business functions or units ◾ Guide its development of functional capability ◾ Confer appropriate authority to accomplish its mission ◾ Identify PMO funding

The following sections describe the preparation of these five elements within the PMO charter.

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Define Business Purpose

The PMO, while dedicated to the pursuit of excellence in project management, conducts its efforts with a somewhat higher purpose—to ensure that project per- formance contributes to improving business performance. How this will be accom- plished is an element of the PMO charter that should be explicitly stated. If the PMO’s business purpose is not clearly stated, the PMO could be viewed as an ad hoc attempt to fix an isolated or temporary condition within the project manage- ment environment, or it could be viewed as a technical entity that may or may not have involvement in project performance management and improvement.

Consider the following five points of discussion when formulating the state- ment of business purpose of a PMO.

Project Contributions to Business Revenue

Project management in many organizations directly represents the product or ser- vice that generates revenue—either directly for customer-specified work or indi- rectly as a matter of products on the shelf. Likewise, project management could concentrate on internal project work that is also indirect but still supports the gen- eration of revenue by making the business environment more efficient and effec- tive. The PMO charter should address these as business concerns that the PMO will manage. Avoid placing specific financial objectives in the PMO charter, as these can be identified elsewhere after the PMO functionality and authority have been established and tested. Rather, indicate why business solution responsibility is being placed under the purview of the PMO.

Reduction in Project Disarray

The PMO can be instrumental in introducing the critical practices needed to gain con- trol of an otherwise disorderly collection of projects. This is not to say that all projects are in disarray, but that a sufficient number of projects across the relevant organiza- tion have performance results that warrant some additional professional oversight and guidance. Project disarray can be identified by a variety of indicators—a change in the types of projects being conducted, reduction in force, excessive turnover and replace- ment of project managers and project team members, changes in senior management, reactions to customer satisfaction issues, and much more. Specify what responsibilities the PMO will have for improving project management performance and what central- ized oversight, control, and support will be included in its responsibilities.

Project Management Competency

Is project management a core business competency? Should it be? The PMO may be established to build both organizational and individual competencies in project

Project Governance  ◾  145

management. At the individual level, the PMO could provide training and educa- tion consistent with an individual’s responsibility within the project management environment. This would be done in conjunction with the identification and intro- duction of best practices in project management that allow them to translate their new skill and knowledge into immediate and effective solutions in the workplace. Similarly, at the organizational level, the PMO can lead the pursuit of increased organizational maturity in project management. Indicate in the PMO charter what responsibilities the PMO will have for improving or enhancing individual com- petency and organizational capability and maturity in project management. This point of discussion could include the PMO’s potential purpose of providing project management technical support—the options for project management mentoring, facilitation of project planning, conduct of formal and informal project audits and reviews, and so forth. In addition to being a primary resource for project manage- ment expertise that nearly all stakeholders in the project management environment can access, particularly project managers, the PMO may also have responsibility for technical process performance. If so, then that should also be specified in the PMO charter.

Project and Business Integration

The PMO’s role as a business integrator has been mentioned several times. The PMO charter should indicate how that role would be played out within the relevant organization. In general, it means identifying what the PMO will do to facilitate the integration of appropriate process and business relationships between the proj- ect management environment and business unit activities. In a broad sense, this represents a variation on the concept of dealing with project disarray resulting from internal inconsistencies and multiple perspectives on how business processes are conducted. The PMO charter can address the PMO’s responsibilities for bringing business and project stakeholders together under common practices and objectives.

Strategic Business Objectives

When properly designed and designated, the PMO can be an extension of senior management within the project management environment. It will carry the results of executive deliberation and decisions for implementation by project managers, and it will return compiled and analyzed results of project performance back to senior management for subsequent deliberation and decisions. This is particu- larly characterized by a project portfolio management process that ensures that executives are involved in making project selection, continuation, and termination decisions. Of course, that is done in the context of ensuring that all current and pending projects are aligned with the strategic business interests of the relevant organization. The highlights of any such strategic alignment responsibility can be presented in the PMO charter.

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Specify Organizational Alignment

This element of the PMO charter specifies how the PMO will relate to other busi- ness units and their functions in the relevant organization. This can be an easy determination for a smaller PMO operating within a relatively flat organization, or it can be an extensively coordinated determination with politically charged impli- cations for a larger PMO or one in which operating units tend to function indepen- dently. There are three practical points of information that are needed to specify the PMO’s organizational alignment.

◾ First, the PMO must have an executive sponsor. Ideally, this sponsor is the most senior person in the relevant organization—the CEO if the PMO is supporting the enterprise. Business needs will help determine whether the PMO is aligned at a level that warrants direct reporting to the executive spon- sor or if it is to be aligned lower in the executive sponsor’s business unit. The PMO charter should identify the executive sponsor and the executive or senior manager to whom the PMO reports, if these are not the same person.

◾ Second, the PMO should be designated at a recognized business unit level— work group, branch, department, divisionb, and so forth. This designation will inherently demonstrate the PMO’s peer business unit relationships within the relevant organization. This designation will either facilitate or con- strain the PMO’s ability to accomplish its business purposes, but nonetheless, it should be presented in the PMO charter.

◾ Third, and somewhat related to the business unit designation above, is the identification of the individual slated to head PMO operations. The indi- vidual selected for this position must have the appropriate position title to manage PMO operations consistent with the business unit designation and the responsibilities assigned, that is, PMO manager, PMO director, and so forth. The incumbent head of the PMO should be named in the PMO char- ter, along with confirmation of the position title.

Highlight Functional Responsibility

The PMO charter should indicate what PMO functionality will be established for new PMOs or what will be added or eliminated for existing PMOs.

First, a review of the PMO functions is needed to determine applicability to the needs of the relevant organization and the stated purposes of the PMO. Presumably, a team responsible for PMO planning will accomplish this. Planners must be cogni- zant of the workload impacts—both in function design and implementation and in function operations—as choices of preferred functions are made. However, with the assumption of qualified resources being assigned to the PMO, a wide range of func- tionality can be addressed. More important is the depth or extent of that functional- ity. Many of the functions presented in this PMO model can be adapted for simple

Project Governance  ◾  147

implementation and use. The PMO can specify these as “initial” or “fundamental” capability. Other PMO functions, those directly aligned with the PMO’s business purposes, can be cited as more comprehensive functions and planned accordingly.

Following this PMO function review, a list of preferred functions can be identi- fied for inclusion in the PMO charter. This can be presented as a general statement of activities to be performed by the PMO, and this might include a basic planning outline for developing a PMO design document and a preliminary schedule for implementing PMO functionality. A more detailed PMO implementation plan can then be developed as a document that is separate from the PMO charter.

Specify PMO Authority

The PMO charter provides the PMO and other business units with an understand- ing of PMO responsibilities. It is therefore very important to outline the authority granted to the PMO to enable it to achieve its business purpose.

A new and usually smaller PMO may not require as much authority as one that has broader responsibilities. In many cases, the specification of organizational alignment is sufficient to define what the PMO can and cannot do based on the implicit authority of its position within the relevant organization. However, if there are unique authority needs, these should be addressed in the PMO charter.

There are five particular areas of PMO authority that should be considered for inclusion in the PMO charter, as needed.

◾ Business and contract management: Define what the PMO is authorized to do with regard to leading cross-functional business efforts and establishing internal and external contracts. In particular, external contract manage- ment has business implications for which the PMO may require signature or review authority. Specify what role the PMO has in business and contract management.

◾ Financial management: Define what financial responsibility the PMO has with regard to financial management. Specify what it is authorized to do regarding the commitment and allocation of funds; any requirements for management and reporting of revenue or cash flow resulting from external, customer work; and preparation and management of an internal business unit budget.

◾ Resource management: The PMO will likely work with resources obtained and “owned” by resource managers across the relevant organization. Specify what authority the PMO has to interact and direct the work efforts of individuals assigned to project teams within its purview. As well, consider any authority needed to redirect individuals to additional projects, project-related training, or follow-on work. This section also may include guidance on how the PMO is involved in selecting the project manager and the project team members as well as responsibility for individual performance review activities.

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◾ Customer relationship management: Determine the PMO’s authority for inter- actions with customers. Specify whether the PMO is the next level of issue resolution above the project manager, whether the PMO is involved in cus- tomer invoicing and payment management, and what role the PMO plays in ensuring customer satisfaction.

◾ Vendor/contractor management: Define how the PMO will interface with vendors and contractors in the project management environment. Specify its level of authority in vendor and contractor selection and in establishing and managing vendor/contractor contracts, and whether it is involved in ven- dor/contractor invoicing and payment management, including oversight of acceptable performance and approval of deliverables.

Identify PMO Funding

This section of the PMO charter may or may not be required as a matter of organi- zational practice. If parent organization funds and the associated budget are being used, this section may simply identify one or more expense codes that can be used by participants in PMO activities.

Conversely, if the introduction of the PMO is treated as a business initiative, then a separate budget is likely needed to appropriately place boundaries on pro- gressive steps of PMO design and implementation. In this case, a funding state- ment should be presented to identify any initial or updated funding to be applied to PMO operations. This inherently implies that PMO operations costs will be tracked and managed.

Establishing and operating a PMO is not a casual expense item. If such an effort is treated as a routine business activity without recognizing the investment costs, the relevant organization may not get the expected value or anticipated results from the effort. The specification of funding in the PMO charter provides an acknowl- edgment that there is a cost associated with the pursuit of excellence in project management.

Develop Project Management Policies Business guidance is prevalent throughout most organizations. Proper oversight of the project management environment warrants similar attention. The PMO must develop necessary policy guidance to ensure that all participants and stakeholders understand the business aspects of project management. The PMO normally only recommends policies; it is senior management, presumably the executive sponsor or executive control board, that approves the PMO’s recommendations and issues the policies for implementation by the PMO. By specifying project management policy, senior management is endorsing the use of project management as a preferred if not core competency within the relevant organization. Such endorsement is vital to the success of nearly all project management endeavors.

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The PMO can facilitate development of project management policy using the three steps described below.

Evaluate Policy Needs

The PMO should examine areas of the relevant organization where development of project management policy will provide benefit without undue burden on individu- als or business units. However, it is likely that some “growing pains” will be expe- rienced before benefits are realized, so some difficulties should be expected. The PMO can minimize any adverse impact by developing a complete understanding of the organization in conjunction with project management policy development.

The PMO should evaluate project management policy needs in the following areas.

◾ Cultural reception: Identify the prevalent culture of the relevant organization and indicate how that will influence the introduction or expansion of profes- sional project management capabilities.

◾ Organizational change capability: Examine the change initiatives of the rel- evant organization to determine (1) how well individuals and business units have responded to the specification and (2) the results of change.

◾ Current business practices: Review business practices to ascertain how they fit with the preferred practices of project management. In particular, identify any business practices that appear contrary to best practices in project management.

◾ Current project management practices: Review project management practices, the methodology, and any linked technical processes and determine whether they represent benefits to project performance and associated business prac- tices in the relevant organization.

This evaluation should enable the PMO to gain insight to the policies and senior management endorsements that are needed to support project management activities. The PMO should then use this information to develop required policies for review and approval by senior management.

Demonstrate Senior Management Support

It is essential that all participants in the project management environment—project managers, team members, business unit managers, customers, and even vendors and contractors—understand the business interest and operational importance placed on project management within the relevant organization. This must be expressed by managers at all levels, and particularly by senior management. Before issuing written policy guidance, the PMO can assist executives and senior managers in conveying their positions on project management as a vital business initiative and an integrated component of their business operations. The PMO can facilitate this by illustrating the need and encouraging executive and senior managers in a few action areas:

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◾ The PMO charter is endorsed and signed by the senior executive in the rele- vant organization. This is followed by personal endorsements of PMO opera- tions by that executive in formal meetings and informal gatherings.

◾ Senior management participants, in reviews of project performance com- mensurate with their positions and responsibilities, routinely provide guid- ance to rectify performance problems and applaud performance excellence.

◾ Senior management demonstrates ongoing awareness of initiatives to improve project management capability, perhaps commenting on them in interviews and written articles. In situations of major initiatives that affect the entire organization, senior management convenes large group meetings to make formal announcements, issue press releases, and establish expecta- tions for cross-functional business unit participation and contributions to the efforts.

◾ Individual promotions in the project management environment are associ- ated with the successful completion of initiatives that produce improved proj- ect performance or integration of project management and business practices.

◾ Consideration is given to making project management a core competency within the relevant organization. This is an executive decision that is a policy statement in itself.

◾ Policies created and implemented in the relevant organization that have appli- cation to the project management environment are signed by the appropriate executive and endorsed by all members of the senior management team or executive control board.

These actions by senior management will convey the business relevance of proj- ect management. They will do as much for policy implementation as will the writ- ten policy document.

The extent to which senior management support of project management appears lacking in the relevant organization provides an additional indicator to the PMO of the work that lies ahead. Any senior management support is needed and welcome. If there is a noticeable lack of support, the PMO can encourage buy-in by senior management by developing better ways to demonstrate the benefits of what can be achieved through the use of effective project management practices. In particular, the PMO can reference business activities and results associated with project man- agement. See Chapter 20, “Business Performance,” for more information about project management contribution to business results.

Prepare Policy Guidance

The PMO, as senior management’s representative in the project management envi- ronment, examines the policy needs and senior management positions on the issues to develop policy guidance that can be implemented to support the efforts encoun- tered within the project management environment.

Project Governance  ◾  151

There are four prominent areas in which the PMO will want to consider devel- oping policy guidance, as summarized below.

◾ Business interest: This type of policy guidance conveys the use of project man- agement for purposes of achieving business objectives. This approach high- lights the fact that project management and business processes and practices must be aligned and integrated. Such policies usually specify or mandate the use of a preferred process. They also indicate whether it is primarily a business process introduced into the project management environment or a project management process introduced for use by business units.

◾ Project management as a core competency: This is a specific policy that tran- scends all business units in the relevant organization. It establishes that busi- ness will be pursued with a high degree of reliance on individual capabilities in project management. This is a business decision that can come only from the most senior executive in the relevant organization.

◾ Enterprise continuous improvement: This is a policy area that enables expan- sion of project management practices both within the project management environment of the relevant organization and throughout the enterprise. It also represents expansion of PMO responsibilities, possibly across business units. Policies in this area specify or mandate the use of practices that provide more comprehensive oversight, control, and support of project management activities. This approach is often aligned with pursuits of increased organiza- tional capability and maturity in project management.

◾ Project management practices: This policy area indicates the required use of the established project management methodology within the project management environment of the relevant organization and, possibly, across the enterprise. It also specifies the preferred business practices, tools, and standards that are applied in project management, and it presents requirements for use of project classifica- tion guidance. As well, it can specify requirements for project audits and reviews.

It should be noted that policy development operates within a different context than the “mere” guidance offered by standards, operating procedures, or regula- tory documents. The latter can be prepared and implemented by the PMO, often on its own authority and perhaps with some level of senior management approval. However, the preparation of project management policy guidance presented by this PMO model is one of developing an “executive directive.” That means that an execu- tive within the relevant organization is establishing official business direction, and in this case, one that requires application of project management practices or principles.

The PMO should prepare its policy guidance in close collaboration with project managers and business unit managers, as the policy may influence them. This effort is one that requires ongoing coordination during policy development to ensure that all parties are aware of adjustments and modifications to current processes and practices that are being considered for implementation. This culminates in a

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meeting for group acceptance of the recommended policy. Then the PMO presents the policy recommendation to senior management for signature and endorsement. When signed, the PMO will then conduct business according to the established policy, implementing procedures, conducting initiatives, and preparing further guidance as necessary to carry out policy.

Develop Project Classification Guidance It is important for project management stakeholders to have a common frame of reference regarding the types of projects being performed. The establishment of a project classification scheme addresses this need. This determination is placed under the “project governance” function because it has distinct business implica- tions. It is also placed here because it requires senior management review and may require an associated policy statement.

Examine Project Classification Purpose

The specification of a classification for every project will assist the organization in describing the important characteristics of each project, and it will allow stake- holders to immediately associate project importance to the business. Project clas- sification, when constructed while considering the business interests of the relevant organization, will be an aid in the following areas:

◾ Selecting, prioritizing, and managing projects in portfolio management ◾ Aligning projects with business objectives ◾ Identifying business and technical risks that may be encountered ◾ Calculating levels of project work performed in different technical areas ◾ Providing general indications of duration, resource requirements, and complexity ◾ Identifying and assigning project managers with appropriate skill and experience ◾ Qualifying team members for participation in the project effort ◾ Selecting vendors and contractors for participation in the project effort

For some PMOs, this information could very well be the project performance indicators that it tracks and manages. The list is sufficiently condensed for use by senior managers, who may or may not have adequate time for detailed reviews of project performance results. Nevertheless, the use of a project classification scheme will convey a significant amount of information in a few words.

Identify Project Classification Criteria

The PMO is responsible for creating and implementing a project classification scheme under this PMO function. Project classification criteria are developed to

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describe the project in terms of the business interests and the project work effort. This PMO function model prescribes a relatively simple, yet fairly complete, project classification scheme. It applies the four factors of nature of business interest, proj- ect size, project value, and project complexity to classify projects.

The PMO can consider the following categories for inclusion in its project clas- sification scheme.

◾ Nature of business interest: This category refers to the importance of the proj- ect to the organization and suggests four criteria.

− Base project: A project that is usually short term in duration, generally noncompetitive, and frequently concerned with providing an adminis- trative or simple technical solution. This represents many of the internal projects conducted within an organization.

− Tactical project: A general-interest project that is usually short to medium term in duration (although some may be long term), tactical or opera- tionally oriented, and concerned with developing or implementing estab- lished products or providing well-defined services.

− Growth projects: A market-based project that can be short to long term in duration, tactical or operationally oriented, and concerned with develop- ing a product or service having market growth objectives. It is performed as a result of emerging market demand, a response to changing business conditions, or a response to changing technology. It is usually concerned with delivery of new products or services or with modifications to exist- ing products and services.

− Strategic project: A market-based project that is usually long term in duration, integrated with the organization’s strategic business plan, and concerned with developing a product or providing a service that meets critical strategic business objectives. It is concerned with providing prod- ucts and services to key customers, selected market segments, and new markets.

◾ Project size: Size is based on the amount of resource labor hours, the number of resources (project team members), and the approximate duration required to complete the project. The PMO will have to calibrate the size values for this criteria category to adequately represent the types of projects it conducts. Some sample values that can be used to describe project size include

− Small: Up to 1000 labor hours, one to three project team members, and less than 2 months’ duration

− Moderate: Between 1000 and 5000 labor hours, two to five project team members, and up to 6 months’ duration

− Intermediate: Between 5000 and 20,000 labor hours, up to 10 project team members, and 6 to 12 months’ duration

− Large: Over 20,000 labor hours, usually more than 10 project team members, and more than 1 year’s duration

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◾ Project value: The estimated cost or value of a project is critical to defining the project classification, as it indicates what financial gain or loss is at stake by undertaking the project effort. Again, the PMO will have to calibrate the project-value figures for this category to adequately represent the range of project values that are common in the relevant organization. Some sample figures that can be used to describe project value include

− Low value: Up to $250,000 − Moderate value: $250,000 to $1 million − Intermediate value: $1 million to $10 million − High value: $10 million or more

◾ Project complexity: Project complexity is based on the following sample ele- ments that may produce complications for the project effort. These sample elements can be adapted by the PMO to address specific matters of impor- tance to the relevant organization. Each of these elements will also require a rating that serves as an indicator of complexity. In general, the PMO can start with simple ratings such as low, medium, high, and very high to describe the impact of these elements on a given project. More detailed calculations can be introduced as needed.

− Number of business units: The number of business units participating in the project, including cross-functional participation and external ven- dors and contractors, their locations considered, will affect project perfor- mance and project management requirements.

− Technology factors: The amount of technology that is introduced into the project will have an effect on the capability to provide the intended technical solution. This includes consideration of new technology, cur- rent technology, the likelihood of technology changes, and technology training requirements.

− Risk: This element considers the business risk produced primarily by external business influences and the technical risk associated with new product development, recurring project work, and development of new technology.

− Strategic importance: A project becomes more complex when it becomes more important to business success. This element examines the alignment of the project with strategic business objectives, the level of importance associated with marketing efforts, and business factors such as net present value and results of cost–benefit analysis. Strategic importance can also be defined by executive mandate or demonstrated interest.

These four project classification categories should be sufficient to identify proj- ects in most types of organizations after criteria values that are more appropriate to the relevant organization are constructed to replace the samples shown.

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Implement Project Classification Guidance

As may be presumed for most governance function activities, the developed crite- ria must be reviewed and approved by senior management. Ideally, executives and senior managers will have been involved in specifying the criteria. When the final approval is received, the project classification guidance can be implemented.

Implementing project classification guidance can be as simple as developing a tool for that purpose. To that end, the PMO should create a tool or evalua- tion matrix that allows project classification criteria to be combined and evaluated together during project initiation. The project classification scheme can then be incorporated into the project management methodology, or other relevant process, with the associated tool used to identify the type of project being undertaken.

Conversely, in some organizations, the project classification process may war- rant multilevel reviews and scrutiny. In such business environments, a more com- prehensive guidance package may be needed.

Project classification guidance provides a common frame of reference that allows all key participants to recognize the type and nature of each project, and it facilitates decisions along the way. As well, the nature of the content of this sample project classification scheme illustrates why this should be addressed within the PMO’s “project governance” function.

Establish Project Manager Authority The concepts of modern project management prompt continuing expansion of the project manager’s role and responsibilities. The PMO must be a proponent for pro- viding project managers with adequate project and business authority to allow them to accomplish their jobs. Of course, this can only be pursued with consideration for existing business practices, project management guidance, and cultural norms of the relevant organization. The PMO may find, however, that if project managers demonstrate responsibility toward achieving business objectives, appropriate levels of authority will be granted.

The PMO’s role in this governance activity will be decided by its own level of authority, as presented in the PMO charter. If sufficiently vested, the PMO can serve to specify the level of project manager authority while also serving as the granting authority. Otherwise, the PMO’s primary objective in this function ele- ment is to prepare recommendations for project manager authority levels for review and approval by the senior executive or executive control board. The latter may be the more frequent approach taken by most PMOs.

Similar to the elements in the PMO charter, the PMO can examine the relevant organization’s business interests, the stakeholders in the project management envi- ronment, and project management performance requirements to identify the types of authority needed by project managers. It can then prepare its recommendations for project manager authority.

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The following are examples of project manager authority the PMO will want to include in its deliberations.

◾ Contractual authority: The PMO must determine whether project managers have any signature authority relative to customer contracts. Presumably, the organiza- tion’s sales management team will sign any initial master contract. Conversely, the PMO may want project managers to have certain levels of authority to deal with such things as contract modifications and statements of work.

◾ Financial authority: The PMO will use its knowledge about the nature of the business to guide the extent of financial responsibility given to the project manager. That, in turn, will indicate the level of associated financial author- ity needed by project managers. This consideration may require collaboration with business units and the accounting department to ensure that granted authority is recognized. It deals with such things as customer invoice man- agement, vendor and contractor invoice management, and in some cases, special or additional employee compensation, such as bonuses or rewards for project team members.

◾ Resource management authority: The PMO will likely operate in an environ- ment where project team members are introduced to projects in a matrix format. This may present a need for broad collaboration within the relevant organization. Project resources working in a matrix format are assigned to resource managers. They are “borrowed” by project managers to work on spe- cific project efforts and then returned to the purview of the resource manager. The PMO must develop recommendations regarding how resource manage- ment authority can be shared between the resource manager and the project manager. Again, the business culture will influence this deliberation, but in some cases, a new approach to project resource management can be designed as a result of the PMO’s effort.

◾ Customer relationship management authority: The PMO will recognize that there are many business elements in the organization that influence each cus- tomer relationship. It needs to determine what role project managers will pursue as a part of the total business effort. Authority issues here deal with such things as customer contact protocols, customer satisfaction, and resolu- tion and elevation of customer issues. This deliberation is particularly impor- tant when the project manager and project team perform work on site at client facilities, where they are the primary representatives of the relevant organization.

◾ Vendor and contractor relationship management authority: The PMO will likely want to be involved in any prequalification of vendors and contractors, and it may have an established process for doing this within its performance of PMO functions. However, once vendors and contractors have been validated, the PMO may find it to be of benefit to allow project managers to select them for specific work on projects.

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The PMO can examine this list of project manager authorities and add to it based on the business interests and needs of the relevant organization. Following this review, the PMO should develop its recommendations for project manager authority. Key stakeholders in the project management environment, and of course senior management, should review these recommendations. Then, senior manage- ment approves these authorities, and the PMO can then implement them in the project management environment.

The PMO may want to consider varying levels of project manager authority. That is to say, project manager authority increases as each individual progresses to more advanced project management positions. Conversely, project manager author- ity can also be specified for individuals who have project performance responsibil- ity, where every project manager is given the same authority level based on standard project management practices rather than on position within the organizational hierarchy.

Establish Executive Control Board The PMO in many organizations will be responsible to an executive team—the exec- utive control board—that provides business guidance and direction for application within the project management environment. A key participant on this board will be the PMO’s executive sponsor. This person will interpret and convey the deliberations and decisions of the executive control board to the PMO on a routine basis. There may also be opportunities where the PMO head participates in board meetings and interactions as a full or adjunct member of the executive control board. In other situ- ations, the PMO may only have an executive sponsor to turn to for advice and guid- ance. However, the executive group having representation across business units in the relevant organization is the preferred and prescribed model for this PMO function.

This executive-level body may already exist within the relevant organization, perhaps operating under a different naming convention. It might be called the management oversight committee or, in a technical organization, the systems con- trol group. It is the PMO’s responsibility to identify and facilitate its inclusion in this senior management board’s business matters. In some cases, a new or smaller PMO may not have sufficient functional responsibility to warrant a direct interface with this senior management board. It then will normally report to a senior man- ager who does. In the rare case where a central, executive oversight group cannot be readily identified, it will fall upon the PMO to seek or facilitate creation of such a body for the purpose of providing executive-level business guidance and direction to the project management environment.

The PMO’s role, as is often the case, is one of facilitating the executive control board in its role and responsibilities to lead and endorse increased capability in project management and to build an effective project management environment. The PMO can perform the following three activities to either create a new governing body or facilitate an existing body as the executive control board for project management.

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Determine Executive Oversight Requirements

The PMO begins this effort by examining the project management environment to determine the project, business, and technical oversight requirements. In conjunc- tion with this examination, the PMO also collaborates with any existing control board members, potential members, or the PMO’s executive sponsor to gain an understanding of the depth and extent of oversight that such a board would prefer to have within the relevant organization’s normal mode of operations.

The PMO should examine the following prominent functional areas under its purview to prepare a list of recommended executive control board oversight respon- sibilities for consideration by the executive control board.

◾ Methodology development: The control board should consider whether its review and approval are needed to authorize and fund project manage- ment methodology development. The board’s endorsement will certainly be needed, but it may defer development responsibility to an appropriate techni- cal board or committee, or even to an individual executive or the PMO.

◾ Knowledge management: This function provides for the exchange of project man- agement and project performance information in the form of status reports, project work plans, and technical deliverables. This function also deals with implementing an “executive dashboard” that summarizes all project manage- ment information online at a glance. The control board will need to determine the type, frequency, and receipt method for the project information about which it needs to keep itself informed so that it can make timely business decisions.

◾ Project governance: The control board or executive sponsor will be the issuer of project management policies. The board must determine the scope of policies it will consider as a group and which policies will be deferred to the executive sponsor or PMO.

◾ Organization and structure: The executive control board may want to be included in deliberation and decisions regarding how project managers are functionally aligned, and assigned, to project efforts. This could be par- ticularly important if the PMO is recommending a change to the current organizational structure and practices. This also may be only a one-time con- sideration that warrants senior-level management involvement.

◾ Resource training and education: The executive control board may want to be included among those initially trained in project management practices and principles. It needs sufficient understanding of project management, although not the intensive training of project managers and team members, to effectively oversee and use the project management environment to achieve its business objectives. The board will have to decide on the training it will receive and, through PMO recommendations, the training other project management participants will be given.

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◾ Project auditing: The executive control board may want to influence, and possibly control, project audit efforts. It must determine whether it will be involved in constructing the criteria or simply approve the PMO’s recom- mended criteria for conducting project audits.

◾ Portfolio management: This function may be the most critical and essentially requires participation by the executive control board. Unless otherwise del- egated, the executive control board inherently has responsibility for project portfolio management within the relevant organization. It should be involved in establishing both the process and the criteria that will be used to assist it in making project selection, continuation, and termination decisions that affect the outcomes of business.

◾ Business performance: The executive control board will likely want to influ- ence how the PMO supports its business initiatives and strategic business plan. Considerations in this functional area enable the control board to direct the PMO in specific business integration activities within the project man- agement environment.

These are examples of the functional considerations the PMO can formulate in preparing control board oversight requirements. It is suggested that the new PMO start with just a few of the most important requirements and then add additional responsibility to the executive control board over time. It can also be noted that the size, culture, and business objectives of the relevant organization may influence delegation of some of these requirements to other technical or business committees that may be better positioned to deal with them.

Set Control Board Parameters

The PMO’s next step is to help set the parameters for the executive control board’s project management oversight activities. This will provide an operating basis and a common understanding of responsibilities among board members and business units.

The PMO should address the following elements when preparing the param- eters for executive control board operations.

◾ Purpose: The purpose of establishing and maintaining the executive control board for project management oversight is stated in the language and style of the relevant organization. The control board will be an active and positive influence on the project management environment when a well-defined pur- pose for its existence is established.

◾ Roles and responsibilities: The roles and responsibilities of board participation in project management oversight are defined. This includes identifying the PMO’s executive sponsor on the board and the PMO’s relationship to the

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board. It may also include specification of those executives having project portfolio management responsibility.

◾ Membership composition: It is a very good thing to know exactly who are the members of the executive control board. It is equally important, both for the board members and the PMO, to know whether alternative board members are required for meetings, activity coordination, and decision-making pur- poses. The PMO’s identification of board members facilitates communication and collaboration requirements.

Prepare Control Board Operating Procedures

The executive control board will fall into an effective routine in a shorter period of time when operating guidance is prepared for use by board members and those con- ducting business with the board. The regard for executive time is a prevalent issue in organizations across most industries. In many cases, the issues are minimized through adequate advance planning for executive participation. In this activity, the PMO prepares the recommended operating procedures for conducting executive control board activities with a focus on accommodating board member participa- tion. The board then will review and implement these procedures.

The PMO should consider the following elements in its preparation of recom- mended procedural guidance.

◾ Preparation and deliberation: Procedures should specify the responsibility of board members to prepare for each meeting. This could include reviewing the agenda, reading point papers, or examining status reports. The procedures also can specify the required advance distribution times (e.g., 1 week for point papers, 3 days for the agenda, etc.) in order for matters to be considered at an upcoming meeting.

◾ Meeting frequency and timing: Procedures should prescribe a recurring meet- ing time, either monthly or quarterly, so that board members can plan and arrange their participation. The duration of every meeting also should be standard for planning purposes. The procedure might also indicate the condi- tions and means to conduct special, interim meetings.

◾ Collaboration process: Procedures should identify the preferred methods of collaboration outside of scheduled meetings. This is particularly important when a board member is reviewing a document and requires additional infor- mation. The procedure might specify that the document producer serve as a primary contact for additional information or that the PMO serves as a clear- inghouse for such requests and will manage getting a response to the requester. This procedural area may also specify the means of individual collaboration using e-mail, telephone, informal meetings, or automated collaboration tools.

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◾ Action management: Procedures should identify how control board action items will be managed—both those actions assigned to board members and those referred to the PMO or other business unit. This can include guidance on who can make assignments and specify completion dates, how progress is tracked and managed, and who closes action items.

The PMO will have to discern from its internal experience what procedures are needed and how they are conveyed to the executive control board and others having affiliation with the control board’s activities.

Align Business and Technical Committees The PMO’s responsibility for some if not all areas of project management will war- rant interaction with existing business and technical committees within the rel- evant organization. This is similar to interactions with the executive control board, but here, the PMO is soliciting guidance from specific business activities and tech- nical leadership groups. In larger organizations, there may be several such groups. In smaller organizations, the executive control board, as defined earlier, may be the group that also manages business and technical issues and guidance.

The primary objective of this activity is to ensure that the PMO has the neces- sary input and guidance from relevant committees so as to effectively incorporate their interests, and sometimes their mandates, into the project management pro- cesses and practices. The PMO can use the following three steps to conduct initial alignment with relevant business and technical groups: (1) identify business and technical groups, (2) set up relationships, and (3) manage those relationships.

The PMO will likely have insider knowledge of business unit activities to ade- quately identify business and technical working groups and committees. This can be assured by the PMO with some additional examination of the organizational structure to uncover any “hidden” or newly formed groups. Some groups will be more deliberating and directive in their purpose, while others will be aligned with managing initiatives or leading forums. The PMO should identify all such busi- ness and technical groups in the relevant organization, and possibly in any parent organization as well.

In larger organizations, there may be multiple technical disciplines represented across business units. It is particularly important to recognize major technical com- ponents, especially if they have a technical guidance group. This will ensure that they are included in the committee relationships that the PMO will establish under this activity.

The PMO should then review each of the boards, committees, and action groups it has identified to understand their roles and responsibilities and their pur- poses within the relevant organization. It will then decide which groups on the list will be pursued for business or technical alignment. For the most part, the PMO

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should recognize that in this process, it is primarily seeking sources of business and technical guidance that it can then integrate into project management opera- tions. That is to say, the PMO will align itself with such groups to ensure that it thoroughly understands and is accurately conveying technical and business needs and interests of the relevant organization into the processes and practices of project management.

The PMO should initiate contact with business and technical managers who head the groups identified for PMO alignment. In some cases, the PMO will simply request representation on a relevant board or committee, and this represents a peer relationship. In other cases, the PMO will be establishing an oversight responsibil- ity for the identified group and a reporting requirement to the PMO. This type of business unit relationship should be examined carefully to ensure that operat- ing procedures are properly developed, that other board responsibilities are not usurped, and that the PMO retains reasonable control of the project management environment. Some technical or business oversight relationships may require execu- tive control board review and sign-off acceptance by the PMO’s sponsor.

The PMO can then proceed to participate in the business and technical group relationships it has established and their associated activities. In many cases, the management of such relationships is a matter of routine information coordination. For oversight relationships, the PMO may have to prepare and participate in man- datory meetings and carry away action items.

Postscript for the Smaller PMo The “project governance” PMO function specifies many activities that provide oversight and guidance or otherwise specify the business influence of the project management environment. This function is somewhat laden with bureaucracy that is beyond the capability of the smaller PMO. However, even the smaller PMO must ensure the creation of a project management environment that is responsive to business needs and interests and whose behavior is consistent with the same senior management expectations and business guidance that are applicable to all business units within the relevant organization.

Here is a list of some of the more important project governance activities on which the new or smaller PMO can focus:

◾ Develop a PMO charter and get it approved at the highest executive level. This guides the activities of the PMO and its oversight, control, and support of the project management environment. It represents the PMO’s operating orders, and it designates responsibility and authority to act within the rel- evant organization.

◾ Identify the PMO executive sponsor and establish an “executive control board.” The smaller PMO will likely have an initial focus on technical

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work performance within the project environment and will distinctly need senior management participation to add insight and guidance to the busi- ness dimensions of its operations. This board also will inherently address any policy development that is needed to support project management activities. Successful integration of business interests will pave the way for an expansion of PMO responsibilities and influence across the enterprise. It is good for the project management environment to have such representation.

◾ Develop a project classification scheme. This promotes a common under- standing of project activity within the project environment and across busi- ness units. It does not have to be complicated, but it must accurately define the prominent types of projects conducted within the purview of the PMO.

◾ Identify and recognize the roles of key business and technical management groups within the relevant organization. Know where to go to get pertinent guidance. Appropriate oversight relationships will likely emerge as needed.

The bottom line of project governance is to ensure that project management is conducted according to the prescribed processes and procedures, as endorsed by senior management and aligned with business needs and interests.

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Chapter 6

Assessment

Organizations improve business and project management performance by ana- lyzing three interrelated factors—people, processes, and practices. Some organi- zations tend to focus on only one of these factors and likely become very good in that area, sometimes to the detriment of the other two factors. However, as organizations become more project based and pursue project management from an enterprise perspective, an integrated approach is needed to manage all three factors throughout the relevant organization. This highlights the need for assess- ments to ascertain current position and progress toward enterprise-level project management goals.

In the project management environment, initial assessments are conducted to establish a baseline for the current state or conditions. In turn, assessment results facilitate the formulation of strategies and action plans to guide advancements or improvements in the current state or condition. Then, follow-up assessments are performed at intervals to measure improvements or advancements relative to the initial baseline state or conditions.

The term “project management assessment” appears to have some variation in meaning across industries and even among different sources within the project management discipline itself. For the purposes of this project management office (PMO) function model, assessments are conducted to evaluate three facets of proj- ect management—competency, capability, and maturity.

This model also distinguishes between assessments and audits. Where assess- ments measure conditions, audits measure performance resulting from those condi- tions. (See Project Auditing Activities across the PMO Continuum, Chapter 15.)

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This “assessment” function enables the PMO to

◾ Identify project management assessments than can be used within the rel- evant organization

◾ Evaluate conditions of project management competency, capability, and maturity ◾ Develop strategies and action plans to improve project management performance ◾ Validate the use of project management standards and practices within the

enterprise

This PMO function is another form of project management oversight within the relevant organization. It represents the PMO’s ability to influence growth and advancement of project management competency, capability, and maturity— ideally across the entire enterprise.

Project environment interface Concepts The PMO’s role in conducting assessments spans a broad range of activities that evalu- ate project management competency, capability, and maturity—all based in accurately identifying the current conditions and then implementing action plans to improve upon or otherwise advance those conditions to achieve continuous-improvement objectives.

First, the PMO can assist in determining individual project management com- petencies within the project management environment. Such assessments are useful in aligning project team members with project tasks and responsibilities, indicat- ing potential for professional advancement, and identifying requirements for addi- tional training in project management and related skills and knowledge.

Second, the PMO can facilitate identification of overall project management capa- bility within the relevant organization. This assessment is helpful in developing and implementing standard and repeatable project management methodology processes for use across business units; improving project management efficiency and effectiveness; and implementing an approach for management of people, processes, and practices.

Finally, the PMO can facilitate the identification of project management rela- tive to the integration of business and project management practices within the enterprise. This assessment is helpful in aligning project performance with strate- gic business interests and objectives, involving executives and other stakeholders in the business aspects of project management, and establishing the PMO as an enterprise-wide business influence.

Business environment interface Concepts The PMO will initially prescribe and conduct assessments primarily within the project management environment. However, as organizational capability and

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maturity in project management become viable business considerations, assess- ments will expand to include the participation and contributions of business units that interface with the project management environment. At the highest level of maturity, the PMO will normally interface with all business units in the relevant organization.

The broader assessments of the relevant organization, possibly the entire enter- prise, will enable business managers and project managers to join forces in pursuing the challenges of business and the achievement of strategic business objectives. The more each manager knows about the other’s interests and needs, the more they can be made compatible. Assessments will help to identify commonality of purpose and establish overall management commitment to excellence in project management.

In many organizations, projects represent a prominent aspect of business rev- enue. Therefore, it is quite appropriate to evaluate how well an entire organization influences project performance, project management efficiency, and management effectiveness. It is likewise essential to ensure that executive-level decisions are applied in a timely manner to guide projects toward the achievement of business objectives. If executives are not attending to projects as a prominent source of busi- ness revenue, who is? Assessments conducted by the PMO can and should include evaluations of the level of involvement of executives and senior managers in project management. It is likely that these organizational leaders are already attending to critical business responsibilities, but they may not be fully engaged with a major component of the business—project management. Assessments and the resulting action plans are not intended to change their demonstrated successful approach to business. Rather, they are intended to enlarge their perspective of project manage- ment contributions to the achievement of business objectives.

Assessment Activities across the PMo Continuum The PMO’s “assessment” function represents an effort to understand the current state and plan the future state of competency, capability, and maturity within the project management environment, the relevant organization, and the enterprise.

Table 6.1 presents an overview of the range of prescribed PMO assessment activities according to each level in the PMO competency continuum.

In the absence of a higher-level PMO, the project office examines and improves general capabilities in project management as best can be achieved by the project manager and project team members. However, it primarily will be a contributing participant in assessments that are prescribed and conducted across all projects.

Midrange PMO levels have the responsibility of leading project management assessments to determine competency, capability, and maturity. They will review and select or recommend the assessment models to be applied, plan and conduct the assessments, and prepare action plans for achievement of project management improvement strategies.

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Assessment  ◾  169

The center of excellence performs in an advisory and support role to evaluate and quantify the improvements achieved within the relevant organization and to collabo- rate on the expansion and use of project management assessments across the enterprise.

PMO assessment activities usually include three components—the identification of an assessment tool or model, the evaluation or assessment, and the action plan to advance competency, capability, and maturity. Assessment has alignment with the PMO “standards and metrics” function (see Chapter 3), as assessments are generally conducted to determine how well standards are being achieved. There also is likely to be some general link to other PMO functions as assessment results identify strengths and weaknesses in various areas of project management oversight, control, and support.

Assessment Function Model The PMO should become the resident expert in assessments associated with project management. That means (1) knowing the types of assessments that can be utilized to achieve desired improvement in project management performance and (2) facili- tating the accomplishment of those assessments to begin the improvement efforts.

The prominent activities of the PMO’s “assessment” function model are depicted in Figure 6.1. Each activity is described in the following subsections.

Conduct Competency Assessments The PMO should conduct competency assessments first from the perspective of helping individuals to ascertain their own level of skill and knowledge as a benefi- cial step in professional development. Then, it can view competency assessments from the perspective of making project team performance more effective. Finally, it must also pursue competency assessments relative to business interests, whereby the strengths and weaknesses are identified and actions are taken to improve individual competency contributions to the overall achievement of business objectives.

The PMO can address competency assessments as presented in the following three activities.

Conduct Competency Assessments

Conduct Capability Assessments

Conduct Maturity Assessments

Identify competency assessments

Identify capability assessments

Identify maturity assessments Conduct maturity assessments Implement maturity advancement plans

Conduct capability assessments Implement capability improvement plans

Conduct competency assessments Implement competency improvement plans

FiGURe 6.1 “Assessment” function model.

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Identify Competency Assessments

For the purposes of this model, competency is a measure of individual technical or professional skill and knowledge and, in some cases, includes determining the ability to apply that skill and knowledge within the project management envi- ronment. In general, competency is not a direct measure of experience. However, to the extent that experience contributes to the retention of skill and knowledge, experience can influence increased competency. As well, it is possible that someone with less experience could demonstrate greater competency in the comprehension and application of skill and knowledge than someone with more experience, par- ticularly when new concepts, practices, or standards are introduced. Therefore, the PMO will need to be precise in selecting the assessments used to evaluate compe- tency in the project management environment.

Competency assessments are normally conducted with reference to a specific skill, knowledge area, or performance standard. The following are a few relevant methods that the PMO can consider for use in evaluating individual competency in the project management environment.

◾ Project management competency assessment: An evaluation of individual skill and knowledge of concepts, practices, and principles of modern project man- agement. This assessment is most applicable to project managers; however, the PMO also may consider its use for project team members and other proj- ect stakeholders as well.

◾ Technical competency assessment: An evaluation of particular technical skills and knowledge needed by members of the project team having responsibili- ties for achievement of the technical work elements of the project. The PMO will have to determine the nature of technical competency to be measured and select assessment tools for the various technical disciplines aligned with project efforts.

◾ Professional certification: In lieu of specific competency assessment tools, the PMO can consider professional certification credentials as an indicator of technical or professional competency. Of course, it will have to identify the basis by which such awarded credentials evaluate skill and knowledge and determine whether that is an acceptable indicator of competency within the relevant organization.

For the most part, unless the relevant organization is in the business of develop- ing project management competency assessment models and tools, the PMO will be wise to obtain such competency assessments from external sources. These sources normally administer the assessment, compile and analyze assessment results, and provide recommendations for improvement—as comprehensive a support package as is needed and arranged by the PMO.

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Perform Competency Assessments

This activity presents an overview of the primary activities the PMO will normally perform in conducting competency assessments. It can review and consider the following steps as it prepares to evaluate competency in the project management environment.

◾ Collaborate on the need for competency assessment: Achieve concurrence and approval of key managers in the relevant organization before proceeding with the assessment.

◾ Select the competency assessment instrument: Determine the project manage- ment or technical standards to be measured and select the assessment instru- ment that will measure individual competency against those standards. Plan and coordinate arrangements for assessment administration to include likely participation by the assessment instrument vendor.

◾ Announce the competency assessment: Prepare an announcement that describes the need for the assessment relative to planning and achieving business inter- ests, and not as a measure of individual performance. Emphasize the confi- dential nature of individual assessment results, and indicate how the PMO and senior management will review results from a group perspective.

◾ Notify assessment participants: Notify selected assessment participants of the arrangements for taking the assessment. Dates, times, and location will need to be conveyed for paper-based assessments; date and time periods, Web addresses, and access passwords will need to be conveyed for online assessments.

◾ Conduct the assessment and analyze results: Monitor internal or consultant activities through the assessment process, normally concluding with the delivery of a report of analyzed competency results (and possibly recommen- dations for improvement).

◾ Review results and formulate strategies: Distribute the competency assessment report for review by the PMO and key managers in the relevant organization. In turn, convene this group to deliberate and discuss strategies for overall competency improvement, to include such things as

− Enrollment in project management training programs − Enrollment in technical training courses − Project management mentoring − Process guidance improvement − Policy guidance improvement

◾ Prepare the action plan for competency improvement: Develop an action plan with specific activities, responsibility assignments, and completion dates to implement the selected strategies for improving individual and overall com- petency within the project management environment.

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Implement Competency Improvement Plans

The action plan for competency improvement can range from uncomplicated to complex in nature, and the PMO will normally have responsibility for its imple- mentation. In the case of competency improvement, there will usually be involve- ment by the human resources training unit, as training solutions are the common response to competency issues. Along those lines, project managers will undoubt- edly serve competency improvement efforts by helping to define training needs for themselves and their project teams. They would also likely be involved in imple- menting any nontraining solutions contained in the action plan. Action plans that address nontraining solutions are more prevalent in the capability and maturity sections of this function model. This competency section will focus on implement- ing the training solution.

The PMO’s responsibility to conduct or otherwise manage the implementation of the training solution for competency improvement is characterized by several key steps.

◾ Specify the training requirements: Per the weaknesses identified in the compe- tency assessment, determine the type of training required to improve indi- vidual contributions to project management efficiency and effectiveness and project performance.

◾ Identify and select the preferred source of training: Review internal and external sources of training program delivery, confirm that they have existing courses or programs that will fulfill current training requirements, and select the training provider that will best serve the interests of the project management or technical competency improvement effort.

◾ Arrange delivery of the desired training courses or program: In collaboration with the training provider, determine the training courses or program to be deliv- ered and schedule them for delivery in the project management environment.

◾ Administer training program enrollment: Notify training participants of the general availability of training or of their selection for attendance at specific times and locations. Publish and distribute the schedule, delivery dates, and location for each training program, and include information that identifies the benefits of attendance. Convey PMO and relevant organization encour- agement to enroll and attend prescribed training programs. Specify the pro- cedures for online or manual training program enrollment.

◾ Conduct the training program: Monitor training program delivery, to include participant registration, attendance, and completion. Review instructor and participant evaluations of each training program conducted.

The PMO should evaluate how well the training solution has translated into competency improvement in the workplace. It should be able to informally discern some level of individual and group performance improvement soon after training

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has been completed by individuals. As well, it can conduct another formal compe- tency assessment after some reasonable period of time, perhaps annually, to obtain quantifiable competency improvement information and measurement.

Conduct Capability Assessments The PMO should conduct project management capability assessments to ascertain what is being done to achieve a professional level of project management in the relevant organization. The desired level of capability is normally indicated by the preferred standards of project management or internal policy guidance. The project manage- ment capability assessment helps to identify how well those standards are being met.

The PMO can address capability assessments as presented in the following three activities.

Identify Capability Assessments

For the purposes of this model, capability is a measure of (1) what people, pro- cesses, and practices are currently in place in the relevant organization and (2) how well they contribute to the achievement of project management objectives. Project management capability assessments often involve a cross-examination of both the business environment and the project management environment.

The following is a list of several of the more prominent project management capa- bility assessments that the PMO can consider for use in the relevant organization.

◾ State-of-project management assessment: A comprehensive examination of the project management environment to determine capability derived from orga- nizational structure and project resource alignment, project management methodology deployment, and senior management oversight and involve- ment in project management. These three assessment components can be examined separately, each requiring about the same time it takes for the com- plete assessment, but they provide extremely valuable insight to the PMO when combined and performed concurrently under this type of assessment.

◾ Project organizational structure assessment: An examination of how project management responsibilities are aligned within the relevant organization and of how project resources are acquired, assigned, and managed within the project management environment. It also usually includes an evaluation of the reasonableness of project manager and project team member workload in terms of the number and types of projects assigned and indications of indi- vidual ability and competency to accomplish the required work.

◾ Project management methodology assessment: An examination of the complete- ness of the current methodology process used in the course of managing proj- ects. This assessment has a particular focus on identifying gaps in essential project management activities (consistent with the specified standards), and

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it includes an evaluation of how well currently prescribed processes and prac- tices are being accomplished.

◾ Senior management oversight assessment: An examination of leadership activi- ties in the relevant organization, possibly including the PMO role, to ascer- tain the current level of senior manager awareness of project management capability and involvement in project management oversight, control, and support. This assessment can also be used to identify executive and senior management strategies and perspectives for desired capability within the project management environment.

◾ Standards compliance assessment: If not inherently covered by performing the project management methodology assessment, this examination can identify additional standards that are applicable within the project management envi- ronment and then evaluate their integration and achievement.

◾ Technical capability assessments: An examination that ascertains how well techni- cal aspects of project work are being accomplished. It includes an evaluation of applicable technical processes and procedures and therefore requires an assessor with particular technical expertise that is aligned with the technical nature of projects under consideration. The PMO may have to define the basis or standard that applies to the technical processes and procedures being examined. Where there are multiple technical disciplines present in the project management environment, appropriate technical standards must be defined for each tech- nical discipline. Note that many organizations are familiar with the Software Engineering Institute’s Capability Maturity Model (SEI CMM) that is widely used to guide and establish capability in software development (and related tech- nical areas). In the context of this PMO model, the SEI CMM is a technical standard and approach that warrants examination using a technical capability assessment. It is not a project management process or standard because of its dis- tinct technical content and focus, and it is not a project management maturity model because it does not extend guidance to all types of projects or facilitate enterprise-wide coverage. However, it is recognized as a technical-based capabil- ity maturity model that appears preeminent in its purpose, and it is that capabil- ity that is evaluated within this technical assessment category.

◾ Strategic integration assessment: An examination of the processes and proce- dures associated with project selection, integration, and ongoing manage- ment review relative to the achievement of strategic business objectives, for example, project portfolio management. It includes an evaluation of (1) the project portfolio management practices that are used and (2) the frequency and nature of executive involvement in the project portfolio management process or other similar activity at this strategic level.

The PMO can consider these assessments, or it can devise or acquire others that enable it to obtain indications of project management capability within the relevant organization.

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Perform Capability Assessments

A capability assessment helps the PMO to establish a frame of reference about cur- rent conditions in the area examined. It can use that frame of reference to make decisions regarding the direction to be taken to improve or enhance the current capability.

This activity presents an overview of the primary activities the PMO will nor- mally perform in conducting capability assessments. It can review and consider the following steps as it prepares to evaluate project management capability in the relevant organization.

◾ Identify the type of capability assessment needed: Review observations and proj- ect performance indicators to isolate any particular problem areas that warrant closer examination, and select the appropriate assessments that will provide more detailed insight in those areas. As well, review the broader option for establishing an assessment baseline that will provide a complete examina- tion of capability within the project management environment, and select an approach like the “state-of-project assessment” to conduct the examination.

◾ Collaborate on the need for capability assessment: A capability assessment rep- resents an intervention in the project management environment that will require the time and participation of project managers, project team mem- bers, and other project stakeholders across several if not all projects. Due to this impact, the PMO should obtain buy-in from affected managers and concurrence from other key managers in the relevant organization before proceeding with the assessment.

◾ Identify the capability assessment team: Determine the internal or external resources that will be used to conduct the capability assessment. Capability assessment accuracy and adequacy comes from the deliberations and judg- ment of highly qualified professionals in project management. The PMO can certainly develop that professional competency internally, but it also can call upon external, prequalified professionals who can bring full project manage- ment assessment experience, and a proven assessment process, on relatively short notice to fulfill the PMO’s capability assessment needs.

◾ Announce the capability assessment: Prepare an announcement that describes the purpose for the assessment relative to planning and achieving business interests, and not as a measure of project manager or project team perfor- mance. Emphasize the cross-project nature of the examination to illustrate that no one project or person will be singled out during the assessment. Focus on the benefits of learning the status of current project management capabil- ity relative to industry standards and best practices.

◾ Plan and prepare for the capability assessment: Use the guidance and experi- ence of the capability assessment team to complete assessment planning and preparation activities, to include the following.

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− Identify assessment stakeholders in the relevant organization − Determine the assessment scope and purpose − Establish the assessment period − Identify relevant project managers − Identify other assessment participants − Specify preferred project documentation and sample size for review − Develop a meeting and interview schedule − Notify participants and arrange individual assessment participation

◾ Conduct the capability assessment: A capability assessment requires identifica- tion and verification of what conditions currently exist in the project man- agement environment. Note that if the PMO does not itself conduct the capability assessment, it should monitor assessment team activities through- out the on-site assessment process. The capability assessment team will work on-site to lead and perform the following fundamental activities.

− Initial meeting with management or assessment sponsor − Assessment interviews − Project document reviews − Interim information compilation and analyses − Meeting with management or assessment sponsor (e.g., PMO) to discuss

preliminary findings ◾ Prepare and present capability assessment results: The capability assessment

team will conduct a final analysis of information and prepare a written report of assessment findings and recommendations. Often, the capability assess- ment team will also prepare a summary of findings and recommendations for oral presentation to management and sometimes to the relevant assessment participants in the project management environment.

◾ Review results and formulate strategies: Distribute the capability assessment report for review by the PMO and key managers in the relevant organiza- tion. In turn, convene this group to deliberate and discuss strategies for overall capability improvement. The nature of the assessment and its associ- ated findings and recommendations will enable the PMO to focus on one or more capability development areas. Some of the more common strategies for improvement will lead the PMO to consider the following activities.

− Further detailed examination of capability or competency − Project management and technical training − Project team member and project team development activities − Project management or technical process development − Project management methodology development − Project management tool development/acquisition and implementation − PMO function expansion − Project management mentoring − Implementation of knowledge management system − Implementation of portfolio management system

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◾ Prepare the action plan for capability improvement: Develop an action plan with specific activities, responsibility assignments, and completion dates to implement the selected strategies for improving project management capabil- ity within the relevant organization.

Implement Capability Improvement Plans

The action plan for capability improvement in the project management environ- ment will likely be more complex than not. In any event, capability improvement plans tend to have durations on the order of weeks or months. This is because there are usually some new or significant concepts being introduced, and they usually require sufficient time for advance design planning and coordination actions, fol- lowed by the actual solution development and implementation effort.

To that end, there is no specific activity guidance that can be offered in advance of knowing the type of capability improvement effort being pursued. However, it should be noted that many of these improvement initiatives can be planned and conducted in the same manner as other projects. Here are a few general guidelines the PMO can consider as it attends to project management capability improvement initiatives.

◾ Establish a core oversight team: Convene a core team of end users to conduct deliberations and make decisions regarding the planning and design of the preferred solution. This team is needed whether the initiative is being led by internal project management experts, perhaps the PMO, or external project management consultants. This team will ensure that end users in the project management environment are adequately represented as the project manage- ment experts present design and content considerations for the preferred solu- tion. Above all, ensure that the members of this core team are available at critical design and decision points in the early stages of solution development.

◾ Apply professional project management expertise: Identify and engage qualified professionals in project management to introduce capability improvements in the project management environment. The PMO should involve experi- enced professionals who can comprehend and convey the concepts and prac- tices of modern project management and their integration with technical and business interests. If this expertise is not readily available within the relevant organization, the PMO may need to consider the use of external resources that can bring essential project management experience and expertise to the initiative. An added value of using external expertise is that qualified con- sultants should bring experience that expedites achievement of the initiative.

◾ Obtain executive support: Obtain executive support for the initiative, and facilitate continuation of that support through completion of the initiative. First, executive support will be needed to provide adequate funding for the capability improvement initiative. Presumably, the PMO will be able to show

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the benefits and business advantage to be achieved by the initiative in order to gain the necessary funding. Second, executive support may be needed to influence the prescribed use of any new processes, practices, or tools intro- duced into the relevant organization, possibly across business units. The PMO should attempt to have this type of support demonstrated at the onset of the initiative, but particularly at the point in time when the solution is ready for implementation. Executive influence is an effective response to most types of resistance encountered.

◾ Prepare users for solution implementation: Make the project management envi- ronment, and for that matter, the relevant organization, ready for solution implementation. In particular, individuals and teams responsible for applying a new process, tool, concept, or activity need to become familiar, and pos- sibly competent, in using the prescribed solution within their work effort. During solution development, keep people informed about what is planned. As the time for implementation approaches, provide information updates and training, as necessary. During implementation, project management mentors provide an excellent means to transfer skill and knowledge regarding use of the prescribed solution. See Chapter 13, “Mentoring,” for more guidance on using project management mentors.

◾ Solicit early user feedback: Provide the means for users to evaluate and respond to capability improvement initiatives. Users often will be the first to discover unintended or unexpected nuances in the new process or inaccuracies or something missing in the solution. In most cases, these represent relatively minor adjustments that can be made to correct deficiencies and then credited to individual feedback. As well, there could be situations of user uncertainty and resistance, and having a feedback mechanism provides a means for users’ concerns to be heard and acknowledged as a step toward their ultimate accep- tance of the solution.

Conduct Maturity Assessments The PMO should conduct a project management maturity assessment to ascer- tain the level of attained achievement of certain capabilities—prominently, project management and business integration in the relevant organization.

Project management maturity assessments provide guidance that allows orga- nizations to plan and pursue continuous improvement in managing and devel- oping project management capabilities across the enterprise. This is accomplished through use of a project management maturity model that specifies progressive and broader capabilities associated with increasing levels of maturity.

While capability assessments address performance in the project manage- ment environment, maturity assessments generally examine that performance plus the alignment of organizational operations and business influences on project

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management. The lower levels of project management maturity do tend to focus on achieving the essential capabilities implemented for use at the project level, as covered in the previous section on capability assessments. In turn, the middle and higher levels of project management maturity begin introducing a broader strategic perspective, one that suggests that project management is a core business com- petency and a way of doing business. The highest levels of project management maturity are characterized by demonstrated executive involvement and support, extended business unit participation, integrated customer and vendor/contractor associations, and defined pursuits that foster continuous improvement within the enterprise and contribute project management innovations to industry.

The PMO can address project management maturity assessments as presented in the following three activities.

Identify Maturity Assessments

A project management maturity assessment is a significant undertaking for any organization. The maturity assessment, even in smaller organizations, can incur several weeks of work for a small assessment team. This is because of the depth and extent of the examination performed. It is an examination that delves deeply into the project management environment. The maturity assessment is an intervention of discovery—going places some project managers have not gone before. In the wake, discoveries are illuminated and adjudged to identify merit or, sometimes, shortcomings. Known shortcomings can be rectified; unknown shortcomings cannot.

The maturity assessment, however, is also a guiding light that helps achieve business advantage in the marketplace, effectiveness and efficiency in the work- place, and professional recognition in industry and everyplace. The discoveries resulting from an effective project management maturity assessment can be used to formulate strategy and develop a comprehensive road map in pursuit of project management excellence.

The PMO will have to select a project management maturity model as its frame of reference for an organizational maturity assessment. The marketplace offers sev- eral project management maturity models. The PMO can consider the following points and features in selecting an appropriate project management maturity model for use in evaluating the relevant organization or enterprise.

◾ Defined maturity levels: The model defines and describes the conditions and capabilities required for each progressive level of project management matu- rity. This includes (1) specification of the indicators used to judge attainment of those conditions and capabilities and (2) the acceptable thresholds to be achieved for each indicator. This makes the model reusable and the results repeatable and consistent for the same and similar conditions and capabilities discovered throughout the relevant organization.

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◾ Adequate organizational coverage: The model presents an organizational perspective of project management capability. It is the organization that is evaluated for project management maturity, not just the capability at the project level. Therefore, the assessment should include participation at the highest management levels across the various business units in the relevant organization.

◾ Prescribed assessment process: The model identifies and describes the action steps for conducting a project management maturity assessment. It enables the user, that is, the PMO or external consultant, to plan assessment activi- ties, prepare informational announcements, schedule and arrange participa- tion, and assign and manage staff responsibilities associated with the maturity assessment.

◾ Essential technical guidance: The model provides detailed guidance to the assessment team regarding technical content reviews, that is, what project documents or materials to examine, what to look for, and how to inter- pret what is discovered. Similarly, interviews and questionnaires are pre- scribed and standardized to ensure consistency of (1) information collection across the selected group of interviewees and (2) responses presented by interviewers.

◾ Comprehensive assessment report: The model provides clear and complete assessment documentation to substantiate the discovery and analysis of findings and to support the determination of the adjudged maturity level. Information tools, assessment templates, and evaluation forms used for infor- mation collection and analysis are identified and, where appropriate and pos- sible, attached to the assessment report.

The PMO may wish to specify other features for the project management matu- rity model that will be used within the relevant organization.

Perform Maturity Assessments

The selection of a viable project management maturity model will allow the PMO to plan and conduct the maturity assessment. However, to the extent that the PMO has competency to conduct a maturity assessment, it may still want to consider the value of a third-party assessor who can provide an impartial and unbiased examina- tion of the enterprise. In some commercially available maturity models, consultants are trained and certified to comprehend the models and to use the associated assess- ment process and materials. Unless the PMO desires to identify qualified individu- als for such training and certification internally, the use of prequalified consultants will likely expedite the accomplishment and ensure greater accuracy of the project management maturity assessment.

The PMO also may want to consider use of abbreviated self-assessment instru- ments based on the preferred maturity model. This usually consists of completing

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questionnaires (normally online) but also removes the elements of personal inter- views and examination of relevant documents by expert assessors. Nevertheless, a maturity self-assessment is an option that will provide a baseline and a basis for the PMO to conduct improvement initiatives.

The following are several common steps that the PMO should anticipate in the course of conducting a comprehensive project management maturity assessment.

◾ Form the assessment team: The activities associated with an organization-wide project management maturity assessment will likely be a small team effort. There is certainly benefit to having multiple opinions expressed during the assessment process. If an external team is used, there will still be a need for active, internal participation. This team should be convened to accomplish initial assessment planning, arrange for participation in the relevant organi- zation, and conduct and manage assessment activities.

◾ Conduct initial assessment meeting: The initial assessment meeting is con- ducted to plan the assessment effort. The assessment team will review the assessment model and process, assign team member responsibilities, and walk through the assessment activities and schedule.

◾ Administer prequalifying participant questionnaire (optional step): This step is performed when the population of the relevant organization is sufficiently large to warrant identification of a representative sample of the total popula- tion. Prequalification is accomplished by administering a preliminary ques- tionnaire to the population as a means to determine the population sample on which to focus. Additional assessment team meetings may be needed to review questionnaire results and select the sample to be used.

◾ Conduct assessment: Assessors will likely convene at intervals during the assessment period to review and compare interim assessment results and to deliberate and discuss issues and accomplishments. The qualified assessment team members who have responsibility for performing the assessment pro- ceed to conduct the following activities.

− Conduct interviews with management − Conduct interviews with project managers and project team members − Examine relevant project management documents and materials − Examine relevant organizational documents and materials

◾ Compile and analyze maturity assessment information: Upon completion of on-site activities, assessors will “retreat” to survey and evaluate the assess- ment information collected from questionnaires, interviews, and document reviews. The assessment team will then develop and deliberate assessment findings and assign a project management maturity rating based on weighing criteria and other guidance provided by the maturity model used.

◾ Prepare assessment report: The assessment team describes its effort and pre- sents the results of its evaluation in a written maturity assessment report. The report commonly includes the following major sections.

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− Executive overview − Assessment approach (model and process used) − Assessment findings (categorized statement of condition) − Assessment recommendations − Report attachments—data collection forms, analysis worksheets, and so

forth

Implement Maturity Advancement Plans

The development of action plans for advancing project management maturity within the relevant organization will be influenced by the maturity level assessed. As alluded to earlier, lower maturity ratings will warrant fundamental project management capability enhancements, for example, use of standard methodology and repeatable processes across all projects, introduction of standards, and implementation of tools and techniques. In contrast, advancements at mid and high levels of maturity will address broader organizational issues, for example, strategic alignment and project portfolio management; organizational change; and centralized project management oversight, support, and control activities (i.e., PMO function implementation).

For the most part, the same general steps for capability improvement plans are applicable to maturity advancement plans. Review and apply those steps for implementing maturity advancement plans. Also consider the following points that highlight a few distinguishing features of maturity advancement plans.

◾ Senior management involvement: While senior management involvement and support is always sought throughout capability improvement efforts, it becomes more essential to maturity advancement efforts. In order to achieve higher lev- els of project management maturity, per comprehensive maturity model guid- ance, executives must demonstrate involvement, support, and leadership as a measure of advanced project management maturity.

◾ Broader stakeholder involvement: The project manager and project team mem- bers are distinctly involved in capability improvement, and they continue their focus on capability development within the project management environment as an important contribution to organizational maturity. As well, other proj- ect stakeholders also take on a contributing role in the achievement of project management maturity. Notably, customer and vendor/contractor participation in the project management environment is characterized by close alignment of business policies, processes, and practices. This suggests that stakeholders are involved in defining some of the solutions needed for maturity, including partic- ipation in the development and implementation of maturity advancement plans.

◾ Cross–business unit collaboration: In a mature project management organiza- tion, support units adapt and integrate business procedures for use within the project management environment. Business units having responsibilities in different technical disciplines will establish links and integration with the

Assessment  ◾  183

standard project management methodology prescribed by a central author- ity (i.e., the PMO), but in collaboration with the variety of technical users throughout the enterprise.

◾ Continuous improvement: In capability improvement efforts, the desired capability is measured, achieved, and maintained. Maturity advancement extends present capability through an ongoing, continuous-improvement effort that addresses: What can be done next? How can current capability be enhanced? What new techniques and technologies can be introduced? What project management innovations have been created internally that can be contributed to industry or the project management discipline? Project management maturity is not main- tenance of current capability. It is growth and improvement of current capabil- ity. Yesterday’s best practices may not be tomorrow’s business solutions.

◾ Strategic enterprise application: The pursuit of project management maturity has strategic importance throughout the enterprise. Maturity advancement plans, even for achieving lower-level project management maturity ratings, recognize this. Project management capability is pursued and solutions devised with consideration for how the entire enterprise benefits. Project management maturity advancement plans are consistent with and contribute to strategic business objectives of the enterprise.

The PMO may or may not control the implementation of maturity advance- ment plans across the enterprise. It normally will be responsible for plan implemen- tation within the project management environment. It may be charged with plan implementation progress monitoring across the relevant organization—until the next maturity assessment is conducted.

Postscript for the Smaller PMo The smaller PMO is not likely to have the strategic focus of its larger counterparts. Its primary responsibility is to establish a reasonable professional level of project management capability. To that end, the smaller PMO needs to have a fundamen- tal understanding of current capability relative to standards or preferred industry practices, with particular focus on competitor capability within a given industry.

Here are a few basic activities the smaller PMO can pursue to evaluate its proj- ect management environment.

◾ Competency: Conduct formal or informal evaluations of competency through observation and performance reviews. If possible, select and administer an instrument to measure project management competency of project managers and at least the key project team members. Review competency measurement results and recommend or facilitate project management training programs for those who need them.

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◾ Capability: Identify the applicable project management practice standards that will best serve the project management environment. Conduct a gap analysis or, if possible, a state-of-project management assessment to ascertain current conditions and capability. If necessary, set a course to achieve closer alignment between established processes and preferred practices.

◾ Maturity: The smaller PMO may not have the scope of responsibility that would necessitate a maturity assessment, although such an effort might be warranted if the PMO were serving a moderately sized organization. Nevertheless, the smaller PMO, in its pursuit to establish essential project management capability, can do so with the proviso that it considers the impacts and influences of its solution implementations on the entire relevant organization or enterprise. The smaller PMO could become familiar with a preferred maturity model and should first address capabilities that advance project management maturity at lower maturity levels. Later, it can imple- ment effective solutions that set the foundation for greater project manage- ment maturity when the relevant organization or enterprise establishes the strategic direction to do so.

Broader assessment responsibilities of the smaller PMO can be introduced as its mission grows and as the value of professional project management capability is recognized within the relevant organization.

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Chapter 7

organization and Structure

The organizational alignment of project managers in the relevant organization is a business decision. That alignment represents the extent of authority and responsi- bility conveyed to project managers to enable them to achieve business objectives in the project management environment. In conjunction with project team structure, organizational alignment contributes to project management capability within the relevant organization. In particular, it determines the influence and interactions the project manager will have with project team members and other stakeholders in the project management environment. Organizational alignment also addresses the PMO’s position of influence in the relevant organization, from which PMO oversight, control, and support activities are derived.

Project structure aligns project team members, and other stakeholders, with the project manager and with the PMO. It defines their roles and responsibilities, but just as important, project structure specifies accountability—presumably to the project manager and, ideally, in relation to and with regard for PMO guidance. The effectiveness of project performance is a function of individual accountability. Therefore, project structure can facilitate or diminish project performance.

This “organization and structure” function enables the PMO to

◾ Establish the PMO’s structure and organizational alignment ◾ Develop project management alignment within the relevant organization ◾ Prescribe project team member roles and responsibilities ◾ Define the stakeholders in the project management environment

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Function implementation will necessitate development of strong executive-level support. This is needed in association with the PMO’s ability to accurately define project management organizational and structural needs, demonstrate appropriate business alignment and fit, and achieve buy-in within the relevant organization.

Project environment interface Concepts The PMO should take the lead role in defining and establishing its own functional capability by developing the organizational alignment with the other business units, as prescribed by the PMO charter. It can then ensure the implementation of capability through specification and introduction of PMO staff members who will implement the functionality needed to achieve business objectives in the project management environment. The PMO can then define, recommend, and implement the project team organizational alignment and structure that will enable desired project performance and project management capabilities to be achieved. Finally, the PMO will be instrumental in identifying all other stakeholders inside and out- side the relevant organization for the purposes of facilitating and administering their varying levels of involvement and participation.

Business environment interface Concepts Most executives and some business unit managers likely will have an inherent interest in the alignment of activities in the project management environment. The PMO will be able to describe that alignment and convey it throughout the relevant organization. It will facilitate executive and senior management involvement in organizational alignment decisions and provide advice regarding the impact and influence of their decisions.

The specified project management and project team organizational alignment will suggest and develop formal and informal professional peer relationships— another facet of business communication and coordination. Organizational align- ment can be created with intended business unit and peer relationships in mind. Perhaps such alignment can be used to achieve a stronger integration of business and project management objectives.

organization and Structure Activities across the PMo Continuum The “organization and structure” function along the PMO competency continuum provides project management capability by establishing an efficient and effective organizational alignment and project team structure that (1) facilitates business

Organization and Structure  ◾  187

and professional interactions among stakeholders and (2) presents sufficient project team and PMO representation within the relevant organization.

Table 7.1 presents an overview of the range of prescribed PMO organization and structure activities according to each level in the PMO competency continuum.

The project office uses established organizational guidance to align and struc- ture the project team to achieve project objectives. The project office itself repre- sents the first level of organizational alignment and structure above the individual project team member.

Midrange PMO levels take on a progressively more active role in (1) specifying organizational alignment and structure of project managers and project teams and (2) defining the relationships of project teams to each other, to the PMO, and to the relevant organization. In general, project team alignment with the PMO is pursued through increasing levels of PMO competency. As well, the midrange PMO will normally seek to progressively expand its business role and recognition as a business unit in its alignment within the relevant organization.

The center of excellence conducts analyses and examinations of the project team structure and alignment within the relevant organization. It is continuous in its efforts to establish the project team and PMO structure and alignment that will maximize capability in the project management environment.

The PMO “organization and structure” function is significantly influenced by organizational culture and established business and operating procedures. This PMO function model suggests that ultimately establishing the PMO as an integral business unit having broad influence over project management policies and direc- tion will increase overall project management capability and maturity within the relevant organization. However, it is the PMO’s responsibility to demonstrate the business effectiveness that warrants such business alignment.

The PMO “organization and structure” function is likely to be achieved in conjunction with other PMO functions. Prominently, project team alignment and structure issues will be affected by the activities of the PMO’s “resource manage- ment” function (see Chapter 9), and vice versa. Relevant organizational interest in any of the PMO functions under the “business alignment” category (see Chapter 17 to Chapter 20) will likewise influence PMO alignment and structure, as those functions represent a distinct focus on business and project management integra- tion activities. However, it is the business objectives and authority established in the PMO charter (see Prepare and Maintain PMO Charter, Chapter 5) that will guide the PMO’s ability to influence organization and structure activities within the relevant organization.

organization and Structure Function Model The PMO should establish a viable position of authority and business function alignment within the relevant organization—for itself and for affiliated project

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Organization and Structure  ◾  189

teams. Otherwise, a business entity other than the PMO, which may not have the same level of vested interest in achieving project management excellence as the PMO, and which is presumably less qualified than the PMO to lead professional project management activities in the project management environment, will apply general experience and rules of thumb rather than practices of precision to guide project management efforts.

This is not intended to suggest that other business units are unable to accom- plish project management. Rather, it is intended to emphasize that the PMO is established for that very purpose, and it should be given the mandate, through appropriate organizational alignment, to represent, lead, and otherwise influence the activities of the project management environment.

To achieve the desired level of influence, the PMO will have to demonstrate greater capability and business benefits than have been shown by the business units it supports. To that end, this PMO function is likely to be one of the more difficult PMO functions to fulfill. However, it can be accomplished in due course under managed and collaborated PMO growth and expansion efforts within the relevant organization.

The prominent activities of the PMO’s “organization and structure” func- tion model are depicted in Figure 7.1. Each activity is described in the following subsections.

Set Up the PMO Structure The PMO should conduct initial planning to establish its own structure and then ongoing planning to expand its structure and reach the desired level of organi- zational alignment. The PMO can use the suggested guidance presented in the

Set Up the PMO Structure

Identify staff needs for PMO functions Introduce PMO staff Analyze and establish PMO relationships

Establish Project Structure

Specify project team and PMO relationship Define standard project team structure Define extended project team alignment

Develop Stakeholder Participation

Manage internal project team stakeholders Manage internal oversight stakeholders Manage internal support stakeholders Manage customer stakeholders Manage vendor/contractor stakeholders Manage other project stakeholders

Figure 7.1 “organization and structure” function model.

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following three subsections to set up the PMO structure and operational alignment within the relevant organization.

Identify Staff Needs for PMO Functions

The PMO charter is the guiding document for this effort, as it contains the speci- fication of PMO responsibilities for the PMO functions to be pursued. The PMO charter should adequately convey the functionality to be established. See Chapter 5, “Project Governance,” for more information about the PMO charter. In this activ- ity, the PMO will have to translate functionality into staffing requirements.

It is fairly common that the core staff of a brand new PMO is made up of one or two senior project managers, individuals deemed competent to organize the efforts within the project management environment. Furthermore, this full-time PMO staff may be the one that is expected to remain in place for the foreseeable future, with no anticipated staff additions. This condition prompts two considerations. First, this small PMO staff must accurately estimate current and near-term (i.e., 1 year) workload requirements to ensure that it can achieve performance expectations with limited resources. Second, the core PMO staff should conduct an early and active search for reliable, part-time assistance, particularly in technical areas.

The PMO will need to set up functional capability according to the PMO char- ter. It can begin by reviewing and prioritizing its responsibilities and activities in each of the 20 PMO function areas designated for implementation. Presumably, a new PMO will not tackle all 20 PMO functions at the onset. Rather, the several most important functions will be introduced and accomplished by the core PMO staff. Then, for each selected PMO function, the core staff will highlight the antici- pated work requirements and identify the staff position responsible for its accom- plishment. In essence, a PMO staff responsibility matrix is constructed.

PMO staff planning should be an ongoing effort unless the PMO has become stagnant in its growth and expansion efforts. However, both initial and ongoing PMO staff planning activities can benefit from a general analysis of PMO staffing requirements from a staff-category perspective. The PMO can define staff needs according to three primary PMO staff categories.

PMO Business Staff

The PMO business staff is represented by the designated PMO manager and by any designated PMO function managers or other operational leaders assigned to the PMO. Usually, the limited cadre of initial PMO staff members in a new PMO will all have business staff responsibilities. The depth and extent of business staff responsibility will increase as the PMO and the project management environment become more mature. General business staff responsibilities for small and large PMOs alike could include

Organization and Structure  ◾  191

◾ Managing PMO operations and PMO staff performance ◾ Establishing PMO functionality for oversight, control, and support of project

management ◾ Collaborating with business units to integrate business needs, interests, and

objectives ◾ Collaborating with technical discipline managers to integrate technical

management ◾ Advising executives and senior managers in professional project management

practices ◾ Contributing to management of customer and vendor/contractor business

relationships ◾ Monitoring and managing project performance ◾ Maintaining and tracking project cost, schedule, and resource utilization at

the program (i.e., multiple projects) level

These PMO business staff responsibilities transcend virtually all of the 20 PMO functions, so they have some applicability regardless of which functions are selected for implementation.

PMO Technical Staff

The PMO technical staff is represented by individuals aligned with the PMO who develop, implement, and manage professional project management processes and practices within the project management environment. It also may include experts in one or more technical disciplines pursued within the relevant organization.

The initial staff members of a new PMO will fulfill this technical staff role on a full-time basis. Other project management and technical discipline experts in the project management environment can contribute their skill and competency on a part-time basis. If PMO growth and expansion is anticipated, part-time techni- cal staff roles could be transitioned to full-time PMO positions. Of course, proj- ect managers and technical leaders are prominent candidates for full- or part-time PMO technical staff positions. The PMO may also want to consider qualified proj- ect team members to fill PMO technical staff roles.

General PMO technical staff responsibilities for either full-time or part-time PMO staff members could include

◾ Developing, implementing, and managing project management processes and practices

◾ Integrating technical discipline and business processes and practices ◾ Performing project management and technical audits and reviews ◾ Researching, recommending, and implementing project management tools

and systems

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◾ Developing and implementing project management and technical discipline standards

◾ Analyzing and implementing improved project management capability solutions

◾ Facilitating project manager and project team activities—planning, mentor- ing, and so forth

Unless the PMO is a mature organization, it will likely have to rely on part-time PMO staff support that is aligned with a specific event or purpose over a prescribed period of time. A common approach to part-time PMO staffing is the creation of a task force or development team from among qualified resources available within the project management environment. Per the sample of PMO technical staff responsibilities cited above, it can be seen that senior-level project and technical managers will be prime task force candidates. These ad hoc teams will contribute a valuable service to the relevant organization and to the PMO as it heads up and provides business and technical direction to the team’s efforts.

PMO Administrative Staff

The core PMO staff will likely have primary responsibility for accomplishing administrative activities that accompany their work in PMO business and technical management areas. However, to the extent that the PMO’s administrative burden can be reduced, it will be more effective in providing timely project management capability improvements. Like administrative aspects of project management, the PMO will have to identify prominent needs and requirements, substantiate the cost, and acquire the necessary resources.

It should be noted that PMO administrative staff responsibilities tend to have a broader connotation beyond that of administrative assistant, although such an individual would be an invaluable PMO staff member. More so, the PMO admin- istrative staff will likely require some fundamental comprehension of project man- agement concepts and practices, which makes this an ideal role for emerging project manager candidates and talented project team members.

General PMO administrative staff responsibilities for either full-time or part- time PMO staff members could include

◾ Collecting, compiling, and distributing recurring project management prog- ress reports and other documents from various project managers for PMO and senior management review

◾ Preparing project performance analyses for PMO and senior management review

◾ Preparing and managing PMO business and technical correspondence ◾ Coordinating and administering training in the project management

environment

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◾ Performing project budget and schedule management using an automated tool and creating program-level master schedules of all projects for PMO and senior management oversight

◾ Establishing and maintaining the project management library and archives and any associated online project knowledge management system capability

◾ Supporting PMO task force efforts by coordinating, compiling, and produc- ing documents and materials resulting from task force efforts

◾ Coordinating arrangements and scheduling routine project audits, mentor- ing services, and project planning support and facilitation

Per the set of sample PMO administrative staff responsibilities presented, it can be seen that, at times, there may be little distinction between administrative staff and technical staff. This category of PMO staff responsibilities is presented to illustrate the workload that can be encountered to warrant additional PMO staff assignments.

Introduce PMO Staff

The core PMO staff will usually be positioned through executive mandate (or through other similar senior management action) to establish the PMO capability. This small team will be charged with creating the preliminary PMO design and implementing initial PMO functional capability. If comprehensive project man- agement capability and maturity are specified as business objectives, the PMO will need to enlarge its staff over time via introduction of additional full-time or part- time resources.

The PMO can use the PMO staff responsibility matrix cited earlier to contrast business, technical, and administrative staff responsibilities against the current capacity to fulfill specified functionality. This means that the PMO should identify any prescribed functional areas that are not adequately covered and identify the staff resource(s) needed to close the responsibility gap relative to the required PMO functionality.

This staffing plan may be an element of the PMO charter for a newly formed PMO, but its review and preparation should be a recurring activity, possibly annu- ally. A staffing plan work sheet can be developed to include the following elements for examination:

◾ PMO functional area identification ◾ PMO function area—performance to be achieved ◾ Requirement for function implementation—mandate or natural expansion ◾ Intended impact of function implementation, for example, business benefit ◾ Resource(s) required for function implementation ◾ PMO resources currently assigned for function area coverage ◾ PMO function area identification

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◾ Function area performance and responsibility ◾ Name ◾ Position title ◾ PMO resources needed for function area coverage ◾ PMO function area identification ◾ Function area performance absent or lacking ◾ Impact of inadequate functional coverage ◾ Resource(s) required to fulfill functional coverage

This sample work sheet can be used to compile requirements and justifica- tion that will be presented to senior management for approval and allocation of resources to the PMO.

The PMO also may want to personally present its staffing plan and associated strategy to senior management and other key participants as a means to further solicit their support and ensure proper conveyance of needs. This may include being available for executive or senior management team meetings at which PMO staffing deliberations take place.

The final step is that of acquisition and assignment of approved resources to complement the PMO staff. The PMO will usually coordinate with the human resources (HR) department for any full-time staff acquisitions and with resource managers for part-time staff assignments.

Analyze and Establish PMO Relationships

The PMO should be recognized as a viable business entity that represents the inter- ests and activities of the project management environment. In some cases, the staff of a newly formed PMO may need to assert an effort to attain the desired level of recognition. In time, PMO contributions to the business effort within the relevant organization will facilitate internal relationship development and foster PMO rec- ognition. In general, PMO recognition is usually achieved through the combined influence of three factors.

◾ Executive mandate and support: The PMO is established and maintained under executive direction as the means to undertake centralized oversight, control, and support within the project management environment.

◾ Business need: The PMO emerges from a fundamental technical or business support team, possibly a methodology development team or capability assess- ment task force, and acquires broader responsibility and authority within the project management environment.

◾ Distinct business contribution: The PMO grows and expands when it is viewed as a contributor to the achievement of business objectives (i.e., revenue gen- eration, improved capability in project management effectiveness, or realiza- tion of customer satisfaction).

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These are prominent factors to be considered and analyzed when defining the PMO’s role and position within the project management environment and in estab- lishing its relationships with other business units within the relevant organization or enterprise.

Internal and external business relationships will be established according to the overall responsibilities of the PMO, consistent with its stage of maturity, that is, its level of progression along the PMO competency continuum. Less mature PMOs will usually have limited need for far-reaching business relationships, and most will be internal. More mature or advanced PMOs will operate more like a business unit and will require business relationships comparable with peer business units within the organization.

An analysis of current PMO responsibilities will provide insight into the busi- ness relationships that warrant pursuit. The following are a few key points for examination and analysis of PMO business relationship needs.

◾ Appropriate technical representation: The PMO will need to integrate the expertise and participation of technical departments—design, manufactur- ing, product development, and so forth.

◾ Alignment with senior managers and decision makers: The PMO will imple- ment policy guidance conveyed by executives, senior management teams, and oversight committees and provide performance results from the project management environment back to these management-level individuals and teams.

◾ Affiliation with internal business support units: The PMO will need support to initiate and conduct customer projects and to manage business processes within the project management environment. Some representative affiliations could include

− Information systems − Human resources − Procurement and contract management − Business development

◾ Affiliation with project resource managers: The PMO may not have project resources directly assigned and thus will rely on resource managers to provide qualified project managers and project team members.

◾ Affiliation with external project stakeholders: The PMO may need to conduct business associated with project performance that could extend outside the relevant organization, to include development of

− Customer relationships − Vendor/contractor relationships − Regulatory agency relationships

A review of these points of examination will enable the PMO to identify and pursue the appropriate business relationships needed to accomplish its mission.

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Establish Project Team Structure The PMO has a vested interest in achieving the prescribed level of oversight, con- trol, and support in the project management environment. All that it can accom- plish is influenced by the degree of formal alignment of project managers and other project resources within its purview. Likewise, the structure by which project team members are aligned under a project manager influences the project manager’s abil- ity to oversee, control, and support the performance of project team members. The third consideration of project team structure includes defining the extent to which external participants will be regarded as members of the project team. This refers primarily to customers and vendors/contractors, but it also includes potential des- ignation of other stakeholders within the relevant organization as members of the project team.

Essentially, the project team structure is defined to include the project manager and project team members, the integration of external participants into that team, and the relationship each project participant has with the PMO. These consider- ations are addressed in the following three subsections.

Specify Project Team and PMO Relationship

The nature of project team alignment with the PMO is generally associated with the PMO’s stage of development along the PMO competency continuum. That is, it is more likely that there will be formal affiliation of project managers and project resources with the PMO when the PMO is operating at an advanced stage. Notwithstanding, there appears to be a prevalent approach in many organizations where project managers and project team members are not aligned with the PMO, regardless of the PMO’s stage of development. However, at least some professionals in the project management discipline would agree that greater project effectiveness is achieved when all project resources are aligned to some degree under the PMO, and this function model recommends that at least project managers be aligned to some extent with the PMO.

The concept of project resource alignment presented here means that the PMO has some range of control over project resource assignments, activity schedules, and performance management. A generally acceptable range of control extends from reasonable influence, where project resources inherently respond to PMO oversight and guidance as a natural approach to project participation, to direct assignment, where the project resource reports to the PMO director, an aligned project man- ager, or another manager associated with the PMO.

The following are four progressive configurations that the PMO can consider in specifying its relationship with project managers and project team members:

◾ No alignment of project resources ◾ Indirect alignment of project managers

Organization and Structure  ◾  197

◾ Direct alignment of project managers ◾ Direct alignment of all project resources

The PMO can identify variations of these configurations to better describe resource alignment in its project management environment. This specification is valuable because it can be associated with impacts on project performance. As well, each configuration indicates conditions that limit or facilitate advancements in project management capability and maturity.

No Alignment of Project Resources

This configuration is one in which the PMO has no apparent direct influence or control over resources assigned to perform work within the project management environment. This is normally associated with the smaller PMO operating at the basic stage of development. However, it is not unusual for a standard PMO to also encounter this absence of direct resource alignment. The following list identifies a few of the prominent impacts of this condition on the PMO and the project man- agement environment:

◾ Strong and extended-period communication and collaboration will be needed to develop and implement project management governance and guidance, project management standards, and common project management tools and systems.

◾ Recurring executive and senior manager involvement may be needed to direct and monitor timely project resource input for cross-project reporting and adherence to the standards of report content for PMO review, analysis, and aggregation.

◾ The ability to implement preferred practices can be limited by individual pro- fessional interests and conflicting business and professional priorities encoun- tered outside the project management environment.

◾ Training for project manager and project team members arranged through business units or individuals could be inconsistent with preferred project management practices.

◾ Capability to identify cross-project needs and reassign project resources on short notice to priority projects may be limited.

◾ Resource utilization across multiple project assignments may not be effec- tively planned and tracked when there is no central oversight, resulting in resource overcommitments and undercommitments to project efforts and project task work that is based on personal schedules and availability instead of business priorities.

◾ Project resource performance evaluations can be inconsistent across the various reporting officials serving as project team member performance evaluators.

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Indirect Alignment of Project Managers

This configuration is one in which the PMO develops active working relationships with project managers who are directly aligned with business units. In turn, those project managers will usually accept and apply PMO governance and guidance when an advantage is identified. As well, some of these project managers will dem- onstrate a willingness to participate with the PMO in developing and implementing standards and practices in the project management environment. This provides a reasonable level of PMO influence, albeit very limited control over project resource assignment and performance. The following list identifies a few of the prominent impacts of this condition on the PMO and the project management environment:

◾ Project management practices may vary across different project efforts, and project team members will need to differentiate the approach and preferences used by the project manager on each project to which they are assigned.

◾ The PMO will likely need to compete for project manager time and influence with the project manager’s reporting official (resource manager) in the busi- ness unit.

◾ The capability to develop a cadre of professional project managers within the relevant organization may be limited by an inherent focus on the technical aspects of project performance rather than on effective implementation of modern project management practices.

◾ Modest levels of affiliation with the PMO will facilitate communication and an exchange of ideas and concepts among project managers who share the PMO as a central point of coordination and collaboration on project manage- ment practices.

◾ Project managers having some level of PMO alignment and awareness will gain a better understanding of the PMO’s support capability in the project management environment, particularly identifying PMO support available for use on their projects. Ideally project management efficiency and effective- ness will improve as a result of each project manager’s PMO relationship.

Direct Alignment of Project Managers

This configuration is one in which project managers work for the PMO when assigned to lead efforts in the project management environment. For the most part, they will receive their assignment from the PMO, and they will be responsible to the PMO for successful project completion and the associated achievement of proj- ect objectives. In turn, the PMO will monitor project progress and project manager performance. Note, however, that direct alignment does not necessarily require direct assignment to the PMO, although that would be the preferred condition. Moreover, this alignment of project managers does not infer alignment of project team members, which is discussed in the next section on project team structure.

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The following list identifies a few of the prominent impacts of this condition on the PMO and the project management environment:

◾ This influential position of the PMO can be used to ensure that business interests and objectives of the relevant organization are integrated and man- aged across all projects.

◾ The PMO will be able to prepare performance reports that are consistent across all designated project managers, but it will likely have to coordinate and manage the incorporation of its individual performance evaluations with those of the business unit if project managers are not directly assigned to the PMO.

◾ The PMO will have greater ability and a more effective means of introduc- ing a viable and repeatable project management methodology process that is mandated for use by all project managers. Similarly, common project man- agement practices and tools will be more likely to achieve widespread use.

◾ The PMO will need to establish the capability and infrastructure to properly manage and support aligned project managers, whether that group is small or large, and that need is increased if project managers are assigned directly to the PMO.

◾ The PMO can qualify and assign project managers to projects consistent with their skill and knowledge, not just because they are available. The PMO can also prescribe and provide technical and professional competency improve- ment activities for individual project managers to broaden their availability for more types of projects.

Direct Alignment of All Project Resources

This configuration is one in which all project managers and project team members are assigned to the PMO as a component of the PMO staff. There may be a distinc- tion made between these project resources and members of the PMO staff work- ing in specific function or support roles. However, once resources are assigned to the PMO, that distinction may be reduced as resources become available for work assigned on projects or on PMO functional efforts. The following list identifies a few of the prominent impacts of this condition on the PMO and the project man- agement environment:

◾ The PMO can hold central accountability for the assignment and perfor- mance of all resources in the project management environment.

◾ The PMO can identify and commit the specific project resources that are qualified to perform approved project efforts.

◾ The PMO can analyze skill and competency requirements, prescribe profes- sional development activities, and forecast project resource strength in spe- cific technical and professional competency areas in advance of needs.

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◾ The PMO can monitor and manage resource utilization across all projects and redirect resources to critical tasks as warranted by project needs and busi- ness priorities.

◾ The PMO can effectively implement standard, repeatable processes within the project management environment.

Define Standard Project Team Structure

The project team structure is primarily a function of project resource owner- ship and project manager authority, as prescribed by most project management standards applied in industry today. Project manager responsibility for achiev- ing project performance objectives must be supported by an appropriate level of authority to control project resource utilization, assign and manage project task performance, and enforce accountability of project team members. Otherwise, the designated project leader is merely serving as a project schedule coordinator or project report administrator and cannot reasonably be held responsible for project outcomes.

The PMO should be influential first in evaluating the effectiveness of the cur- rent project team structures that exist within the project management environ- ment. Then it should define and recommend the project team structure that fits within the established organizational culture and serves the project management needs and interests of the relevant organization.

This PMO function model examines project team structure in a manner that is generally consistent with most prominent standards. It presents three models for the PMO to consider in defining and establishing a project team structure:

◾ Functional project team structure ◾ Matrix project team structure ◾ Integrated project team structure

These structures represent a progressive state of project team cohesion that could exist or be established within the relevant organization. Upon examination of these different structures, many professionals in project management would likely agree that the most effective project team structure is probably represented by a combination of a prominent integrated project team structure with a matrix project team structure applied for some elements of project participation when needed. In reality, most PMOs will probably implement structures that represent a variation of one or more of the structures presented.

Functional Project Team Structure

This represents a project team structure where the project manager has little or no authority over project resources. Instead, project resources are aligned with the

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resource provider, usually a functional manager in a business unit, who has primary authority over assignments and management of project resource contributions to the project effort. Other likely conditions resulting from this project team structure include the following:

◾ A project manager may be designated, but that individual probably fulfills only a portion of the responsibilities normally associated with professional project management. Decisions affecting project performance often are made outside the purview of the designated project manager by one or more func- tional managers, business managers, and technical managers.

◾ Direction, guidance, and the ability to apply effective project management processes and practices can come from various sources. The oversight of mul- tiple functional managers could result in an inconsistent approach to proj- ect management and the uncertainty of project outcome. This condition of authority shared across functional managers also may indicate that there is no central project management authority below the executive or senior manage- ment level.

◾ Functional manager position and business experience may serve in lieu of for- mal project management skill and competency to guide project management activities and affect project progress and outcome.

◾ Project resources serve under the direction and conditions of a functional manager, who—instead of the designated project manager—will evaluate their performance and influence their career progression. At best, a desig- nated project manager will coordinate the efforts of these assigned resources and achieve resource performance results primarily through personal attri- butes of influence and persuasion.

◾ Technical managers may be called to perform as project managers solely because of their demonstrated technical skill and competency rather than on capability and experience to manage the full range of project management life cycle activities.

Matrix Project Team Structure

This represents a project team structure where the project manager has limited authority over project resources, which are now aligned with the project manager for purposes of project work. Some project management standards distinguish between a strong matrix structure and a weak matrix structure. In a strong matrix structure, the project manager has significant authority and control over proj- ect resources during their project assignment. In a weak matrix structure, the resource provider (i.e., functional manager) retains primary authority and control of the resource but fulfills resource commitments to the project manager. Other conditions that are often associated with this project team structure include the following:

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◾ The role of the project manager is distinct and presumably associated with an individual qualified on the basis of skill and experience in project man- agement concepts and practices. It is a role that is generally recognized and appropriately regarded by all project resources and functional managers within the relevant organization.

◾ The project manager will normally evaluate project resource performance as an element of project management. If the resource’s project assignment is an extended one, the project manager may be solely responsible for conducting the annual performance review. If the assignment is shorter, the project man- ager is usually requested to provide an interim resource performance review for the assignment period, and that is entered into the individual’s personnel records and serves as contributing input to performance reward and career progression decisions.

◾ The qualification and designation of project managers as the central point of project management responsibility facilitates the introduction of common and repeatable project management processes and practices. In turn, this capability is readily conveyed to those project resources in the matrix team structure, and they become increasingly effective in their accomplishment of project responsibilities across all project assignments.

◾ The assigned project resource normally cannot be assigned to other proj- ect tasks or other projects without the concurrence and commitment of the resource provider. Similarly, if there is a precise period of performance speci- fied for a particular project matrix team resource, untimely completion of associated project tasks could affect project resource availability.

◾ The resource provider or functional manager who “owns” the resource can assert control or influence to remove or replace the resource assigned to the project. In turn, project managers will need to collaborate with resource pro- viders at regular intervals to ensure that current resource commitments and planned resource assignments are fulfilled in a timely manner. This is a small administrative burden that is encountered primarily when a weak matrix team structure is applied.

Integrated Project Team Structure

This represents a project team structure where the project manager has primary authority over project resources, which are usually aligned through a direct and full-time assignment to a project manager or to the PMO. Certain project manage- ment standards refer to this as a “projectized” project team structure. This model uses the term “integrated” to represent the full-time, ongoing alignment of project team members, project managers, and the PMO in the project management envi- ronment. In the next section, the further integration of external project participa- tion will be considered. Other prominent conditions for this project team structure include the following:

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◾ A distinct central point of authority and responsibility for project manage- ment and project performance is established at the project level and at the PMO level.

◾ Accountability and actions for integration of strategic business objectives into project management efforts become less cumbersome. Executives and senior managers can influence project management direction toward achievement of business objectives without having to personally manage projects.

◾ The project management needs of all business units can be served. Professional project management processes and practices can now be applied to all appli- cable business and technical interests within the various business units of the relevant organization.

◾ Project management resources can be developed and grown within the cul- ture of the relevant organization as they are acquired. This structure pro- motes measurement of project management skill and knowledge alongside technical capability as a qualifier for professional advancement.

◾ Project resources have reduced task performance and scheduling conflicts. These results stem at least from their full-time alignment with a central proj- ect management authority and, possibly, from having one supervising project manager.

◾ Project resource utilization planning and management should be more effec- tive. Project resources can be assigned within the project management envi- ronment to respond to projects having business priority, to fill in temporary resource vacancies, to apply specialized skills, and to contribute to the devel- opment and implementation of PMO function areas. Any nonproject time can be accounted for in developing capabilities within the project manage- ment environment.

◾ Project resources have common performance standards across all projects to which they are assigned. Project managers contribute to establishing these standards and are instrumental in applying them to all project efforts.

Define Extended Project Team Alignment

The PMO will need to examine its culture and business environment in making decisions regarding extended project team alignment. This involves the need to determine how closely other project participants who are external to the relevant organization are aligned with the project and with the project manager. Specifically considered are three project stakeholder groups—customers, vendors/contractors, and regulatory agents. Other stakeholder groups presented in the next section can also be considered, as the PMO deems appropriate. Project performance benefits when representatives from these groups, as well as specifically assigned project team members, know and recognize who are bona fide members of the project team.

The PMO can create a default approach for the inclusion of extended project team members. However, unless the nature of project work is so homogenous and

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the same project stakeholders tend to be present on recurrent projects, each new project will warrant independent examination regarding the need for extended project team alignment.

The consideration of extending the project team begins with understanding the conditions that warrant project team alignment. This is followed by establishing protocols for project team participation and alignment. Then the value of combin- ing tasks and work activities in a common project work plan or keeping them in separate plans is examined.

An overview of these factors is presented for PMO consideration for each of the stakeholders who could be aligned as extended participants of the project team. Decisions concerning stakeholder alignment should be made in collaboration with applicable stakeholders to obtain their concurrence. Alignment consideration should account for current and potential business relationships, particularly with customers and vendors/contractors. To that end, also see the information presented in the chapters on the PMO “customer relationships” function (Chapter 18) and the PMO “vendor/contractor relationships” function (Chapter 19).

Customer Project Team Alignment

Some customers will collaborate on the project’s technical solution and the plans to achieve it, and then they will essentially remain uninvolved outside of routine status meetings and progress report reviews. This is probably not characteristic of a project effort that warrants customer inclusion as part of the project team.

Conversely, some project work inherently requires ongoing customer involve- ment in the development and delivery of the project’s technical solution. This bears consideration for having one or more customer representatives on the project team. In some cases, the customer may even have its own intact project team to be inte- grated. Presumably, there will be a customer contact or customer project manager who will serve as the point of integration.

The PMO or project manager should establish the protocol for this relationship early in the project effort, at or before the project kickoff meeting. In particular, the parties will need to decide how project team members will be assigned respon- sibilities and perform work together. A common approach is for the two project managers to coordinate their plans and then collaborate on the nature and extent of participation by necessary project resources. A related protocol point is establish- ing how technical teams or other subteams having combined participation will be managed, including specifying who will be the subteam leader. Finally, an impor- tant point of protocol is made when the customer distinguishes between being a project team participant and being a representative for acceptance of project deliv- erables obligated under a contract or agreement.

Many project managers find it useful to have key customer activities included in their work plan. Even subtle customer activities associated with the project take time—a few days for a document review, allocation of time for meeting preparation

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and attendance, a period for customer deliberation and decision, and so forth. The project work plan should account for these types of customer “deadlines” and activ- ities. In many cases, the project work plan can become the customer’s work plan, and the inclusion of assigned tasks for the customer will allow everyone to see the sequence of activities for which they are responsible. Besides, if it is not specified in the work plan, how will everyone know that it is an important and timely project activity or even an activity on the project’s critical path?

Vendor/Contractor Project Team Alignment

The vendor/contractor is too often a forgotten entity in some project management environments. If not specifically aligned as part of the extended project team, the vendor/contractor must be distinctly aligned with the project manager. This is a subtle difference in some cases, but it is one that should be examined to determine whether the vendor/contractor project manager works solely with the project man- ager or whether the vendor/contractor participants are integrated with the project team.

The prescribed protocols for this project relationship are very similar to those indicated for the customer project team, only now with reversed roles. Here, the project manager can determine the level of vendor/contractor integration, the pre- ferred approach to technical leadership and project team resource management, and the point of contact for vendor/contractor deliverables.

The PMO should prescribe conditions and standards for alignment, but the project manager will need to make the final decision regarding the integration of any vendor/contractor work plan with the primary project work plan. The condi- tions that normally warrant full integration of project work plans are associated with technical activities where vendor/contractor participants work side by side with primary project team members, serving as technical leads, technical experts, or technical assistants. In other project situations, the vendor/contractor may have responsibility for one or more deliverables that it prepares independently of any participation with the primary project team. That condition probably just requires that a single line item be included in the project work plan to represent the vendor/contractor effort relative to other project activities. Of course, the project manager or a designee on the project team must actively manage that work plan line item.

Regulatory Agent Project Team Alignment

The introduction of a regulatory agent as an extended participant on the proj- ect team may initially seem awkward. However, the purpose of identifying the extended project team in the first place is to ensure that the project manager is able to account for and manage all prominent project activities, with appropriate align- ment of key participants. In some project management environments, a regulatory

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agent can be a prominent participant at critical junctures in the project manage- ment life cycle.

A regulatory agent is often thought of as an external government representa- tive. However, as described in the next subsection on other project stakeholders, the regulatory agent role could originate within the relevant organization or as an external representative. Usually, a regulatory agent is introduced into the project at points of product development or delivery. The decision to formally recognize regulatory agents as extended members of the project team will be determined by the protocol required and by mutual agreement between the regulatory agent and the project manager.

The points of protocol for regulatory agents may be preestablished by the regu- latory agency by the nature of its oversight role and the type of project. The PMO should thoroughly understand these protocols for all regulatory agents and convey associated requirements to project managers and project team members.

It is wise to include regulatory agent activities associated with the project as elements of the project work plan, as would be done for any other key project par- ticipant. This enables the regulatory agent to identify preferred points of activity and, if necessary, to coordinate adjustments as a matter of protocol or convenience. Equally important, the specification of a regulatory agent on the project work plan serves as guidance and a reminder to the project manager and project team mem- bers about the need for timely completion of project activities.

Other Stakeholder Project Team Alignment

The alignment of extended project team participants is a factor for PMO consid- eration based on relevant organizational culture and business needs. The PMO and others within the project management environment benefit by specifying and recognizing the standard composition of an active project team within the relevant organization. In that regard, this PMO function model does distinguish between members of the active project team, including primary and extended members, and other project stakeholders. Per reference to the listings in the following section, the PMO can add or exclude any project stakeholder roles as active participants on the project team.

Develop Stakeholder Participation Who are the project stakeholders in your project management environment? This is determined by the PMO as it attempts to optimize communication among proj- ect participants and to maximize the benefits of stakeholder participation. This section recommends the identification of project stakeholders and describes the role that each can perform relative to project management activities and project performance. The following subsections describe six primary categories of project stakeholders.

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Manage Internal Project Team Stakeholders

This stakeholder category represents those project participants that are directly involved in conducting and managing the project effort. This group is responsi- ble for producing required project deliverables and for achieving specified project objectives. In some project management environments, the project team can also be augmented by full- or part-time participation of PMO staff members. The follow- ing subsections describe the various stakeholders in this category.

Program Manager

This individual is responsible for oversight of multiple projects, usually a collection of projects that are interrelated by similar business interests, technical solutions, or customer base. This position usually serves as the reporting official of the project when it exists in the project management environment, and therefore, it bears the responsibility for project success. Related position titles include “manager of project managers,” “program director,” and “project director.”

Project Manager

This individual is responsible for conducting project management activities through all phases of the project management life cycle, managing project resource utilization and performance, and fulfilling project deliverables and objectives. Related position titles include “project leader,” “project coordinator,” and “project administrator.”

Project Team Member

This individual is responsible for planning and performing work to accomplish project deliverables and to complete selected project management activities, as delegated by the project manager. This position reports to the project manager, either directly or through another project team member serving in an interim management or technical leadership position. The project team can comprise a variety of technical and managerial roles. Some of the more common roles include

◾ Assistant project manager ◾ Technical leader ◾ Technical staff member ◾ Technical specialist ◾ Professional staff member ◾ Task leader/supervisor ◾ Craft specialist/laborer

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In some project management environments, the project team may be aug- mented by full-time or part-time participation of PMO staff members.

Manage Internal Oversight Stakeholders

This stakeholder category represents those project participants that provide senior- level direction and decisions to guide project management toward the achievement of business interests and objectives. The following subsections describe prominent stakeholders in this category.

Project Executive (Sponsor)

This individual is the senior manager responsible for project performance, with the power to authorize project selection, continuation, and termination and project funding. In some organizations, these responsibilities are deferred to a committee of executives or senior management team (e.g., executive control board). However, this role still retains responsibility for the alignment of projects with strategic busi- ness objectives, as can be performed using an effective project portfolio manage- ment system. A related title for this position is “project sponsor.” This role can also be fulfilled by the executive head of a business unit or, in some smaller organiza- tions, by the CEO.

PMO Director

This individual is the head of the project management office, having responsibil- ity for establishing and conducting project management oversight, control, and support across all projects in the relevant organization and, thereby, for each proj- ect at hand. The PMO director advises and collaborates with the project execu- tive and other executives and senior management teams regarding overall project management capability as well as individual and collective project activities and status. Program and project managers may report to or otherwise be aligned with the PMO director, per the organizational structure established for the project management environment. Related position titles include: “PMO manager,” “chief project officer” (CPO), “chief technical officer” (CTO), and “vice president for projects.”

Executive Control Board

The executive control board is the group of executives or senior managers within the relevant organization that deliberates and decides on the capability instituted in the project management environment; determines project selection, continua- tion, termination, and funding (when deferred by the project executive or by busi- ness mandate); and thereby has vested interest in individual project performance.

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Related titles for this board include “project management oversight committee,” “project control board,” and “executive management team.”

Technical Advisory Boards

Technical advisory boards are groups, usually having some executive-level rep- resentation, that convene to deliberate and decide on technical processes and practices applied in the project management environment and in association with technical elements of project performance. Such boards could have special tech- nical purposes, and there could be a board aligned with each major technical discipline within the relevant organization. These groups would collaborate deci- sions and activities with the PMO to achieve integration with project manage- ment processes and practices and thereby would have a vested interest in technical aspects of real-time project performance. A variety of groups by different titles can be established to represent technical discipline interests, including the following few examples:

◾ Product development control board ◾ Technical process control board ◾ Configuration management team ◾ Engineering design committee ◾ Scientific analysis committee ◾ Test and acceptance procedures committee ◾ Construction management board ◾ Manufacturing process control board ◾ Technical achievement advisory council

In some organizations, this type of technical-based group will fulfill the respon- sibilities of the executive control board.

Manage Internal-Support Stakeholders

This stakeholder category represents those project participants within the relevant organization that serve as adjunct or part-time project team members. Their par- ticular business, technical, or project management skill and expertise may warrant concurrent short-term assignments on several small to medium projects, or they could be assigned as full-time project team members on longer projects. The follow- ing subsections describe stakeholders in this category.

PMO Staff Member

This stakeholder group reports to the PMO director to establish and imple- ment PMO functionality, develop project management capability in the relevant

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organization, and support project managers and project teams to achieve fulfill- ment of project deliverables and accomplishment of project objectives. Support is provided relative to the established functional capability of the PMO. See the PMO “career development” function (Chapter 11) for a full list of PMO staff positions.

Project Resource Manager

This is the individual to whom personnel who are competent to perform busi- ness, technical, and project management activities as members of a project team are assigned. This stakeholder is responsible for collaborating with the PMO and project managers to fulfill requirements for qualified project resources according to commitments made. In turn, project resource managers should solicit and incor- porate project manager evaluations of project team member performance into per- formance reports for each assigned individual. Related titles for this position will vary by organization and industry and could include resource provider, reporting official, and so forth.

Business Unit Managers

These stakeholders are the individuals who head the business units or departments in the relevant organization, including their designees, who routinely provide busi- ness support to project managers and the PMO. Because of their interest in business outcomes on each project, they are viable project stakeholders. On larger projects, they could assign individuals with particular business expertise as members of the project team on a full- or part-time basis. Some examples of business unit support stakeholders include

◾ New product expert ◾ Human resources manager ◾ Business development manager ◾ Legal adviser/counselor ◾ Procurement/contracts manager ◾ Contracts manager ◾ Logistics manager ◾ Supply and acquisitions manager

Manage Customer Stakeholders

This stakeholder category represents those project participants that have responsi- bility for ensuring that project outcomes fulfill the intended business purpose or need of the customer’s organization. These stakeholders are members of the cus- tomer’s organization. The specified stakeholders in this category are not always active participants on every project. However, at least one of them is normally

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identified as a primary point of contact for each project effort. Stakeholders in this category are described in the following subsections.

Customer Executive

This stakeholder is the senior manager in the customer environment who autho- rized project selection and funding and who holds strategic-level responsibility for project success. Although not always visible in the customer’s project management environment, this stakeholder is undoubtedly present and working behind the scenes. This is also the point of contact for executive-level discussions, if needed.

Customer Project Manager

This stakeholder is responsible for providing project oversight and control on behalf of the customer’s interests and perspectives for project success. This individual, along with relevant customer project team members, will normally be involved in developing technical requirements and specifications, participating in the prepara- tion and approval of project plans, and tracking project progress through accep- tance of project deliverables. When present, this customer stakeholder serves as a point of contact and coordinates and collaborates directly with the project manager to ensure project success.

Customer Project Team Member

These stakeholders are responsible for performing technical, business, and project management activities on customer-initiated projects that may be performed in conjunction with the project at hand. In some cases, joint project management plans are prepared, and customer project team members join the primary project teams in task efforts. In other cases, customer project team members represent the customer project manager to establish an oversight presence. On many projects in different industries, there is no customer project team in the project management environment.

Customer End Users

These stakeholders are responsible for implementing the project’s technical solution in the customer’s business environment. They may act in lieu of or in deference to the customer project team to test, approve, and accept project deliverables.

Customer Business Manager

This stakeholder is the default customer representative and point of contact for proj- ect efforts. This role normally has responsibility for initiating the project request,

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managing the associated project contract or agreement, and receiving and approv- ing project deliverables. This role is the one usually encountered on a majority of customer projects across industries, and it is used in lieu of a customer project manager and project team on projects where deliverables do not require intense technical oversight, scrutiny, and test and acceptance activities.

Manage Vendor/Contractor Stakeholders

This stakeholder category represents those project participants who have respon- sibility for ensuring that project outcomes fulfill the offering of the vendor/ contractor. These stakeholders are members of the vendor/contractor organiza- tion. The specified stakeholders in this category are not always active participants on every project. However, when vendors and contractors are involved in the project, at least one of them is normally identified as a primary point of contact for each project effort. Stakeholders in this category are described in the follow- ing subsections.

Vendor/Contractor Executive

This stakeholder is the senior manager in the vendor/contractor organization who holds business responsibility for the offering. It is this individual who normally warrants quality of products and performance as well as the fulfillment of any associated contract or agreement. This stakeholder is also the point of contact for executive-level discussions, if needed.

Vendor/Contractor Project Manager

This stakeholder is responsible for leading the vendor/contractor project team in conducting assigned project tasks and in achieving the prescribed technical solu- tion to fulfill the vendor/contractor’s offer. When present, this stakeholder serves as the vendor/contractor point of contact and coordinates and collaborates directly with the project manager to ensure successful completion of the vendor/contractor effort.

Vendor/Contractor Project Team Members

These stakeholders have responsibility for performing technical, business, and proj- ect management activities on assigned projects. In some cases, joint project man- agement plans are prepared, and the vendor/contractor project team members join the primary project teams in task efforts. In other cases, vendor/contractor project team members work independently to accomplish assigned project tasks. A vendor/ contractor project team may or may not be established for each vendor/contractor offering.

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Vendor/Contractor Business Manager

This stakeholder is the default vendor/contractor representative and point of con- tact for project efforts. This role is also prevalent when there is a particular prod- uct or service acquired, in lieu of technical development work associated with the project effort. It is the position usually encountered in business interactions with a vendor/contractor organization.

Manage Other Project Stakeholders

This stakeholder category represents those project participants that have some level of interest in fulfillment of all or part of the project objectives. These stakehold- ers can be associated with the relevant organization or be introduced from an external organization. The stakeholders in this category are not always active par- ticipants on every project. The nature of each project will determine the need for their participation and involvement. Stakeholders in this category can include the following.

Regulatory Agents

These stakeholders normally perform inspections or examinations within the proj- ect management environment to ascertain quality or compliance. This includes regulatory agents from internal business units within the relevant organization who primarily address product and service quality issues. It also can include external representatives who focus on compliance issues such as those from industry or tech- nical standards organizations or government regulatory agencies.

Business Partners

These stakeholders have interests in recouping investments associated with project efforts. They are not normally visible in the project management environment, but they may be encountered through integrated activities with the business environ- ment. These stakeholders will have interests in project performance and in project outcomes.

Industry Partners

These stakeholders have interests in achieving technical and technology solutions that advance industry standards, enlarge markets, or promote associated profes- sional disciplines. They could be visible in the project management environment when one or more projects are involved in developing or implementing a solution of interest to the partnership. In general, industry partners may be business partners, but business partners are not inherently industry partners.

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Executive Management Team

These stakeholders represent the highest level of executive management in the rel- evant organization. This stakeholder category includes the CEO, chief information officer (CIO), and chief financial officer (CFO). It would be rare for these stake- holders to be routinely visible in the project management environment, unless the enterprise is a small business. Therefore, this stakeholder group normally defers oversight responsibilities to the PMO or project executive (sponsor). The absence of visibility, however, does not mean lack of interest. These stakeholders undoubtedly will have some measure of regard and support for project contributions to business, and thereby, they have an interest in the business results achieved within the project management environment.

Postscript for the Smaller PMo The efforts of the smaller PMO should focus on introducing professional project management concepts and practices into the relevant organization, including pro- moting an organizational framework and structure that will facilitate excellence in project management.

Organizations are structured to conduct business according to the traditions and best practices that are best known to them. Many technical and business enti- ties are already structured and are well embedded in the relevant organization, but some of them do not inherently address all the needs associated with an effective project management environment. Conversely, an effective project management organization and structure naturally pursues integration of technical and business functions, practices, and activities.

To that end, the smaller PMO can address a few fundamental organizational alignment activities in the relevant organization to advance awareness of the ben- efits to be gained from having an effective project management organization and structure:

◾ First, establish the professional roles of the project manager and the project team members as best as can be accomplished. Draw awareness to who is a project manager and who is not by defining the role and responsibilities of a project manager within the relevant organization. Similarly, define any stan- dard project team roles, particularly those having delegated project manage- ment responsibilities. When project team members know their specific roles and responsibilities, they will tend to become more effective and efficient in their work environment.

◾ Examine the project participation by individuals in business units. Identify the scope of project support that is provided—support to a few types of projects or to all projects. Determine where the PMO can serve as a central

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coordinator for those activities to streamline the process or to optimize par- ticipation across projects. As well, determine whether business unit partici- pation is included in project planning and listed in the project work plan. Identify project information that can be compiled by the PMO for distribu- tion to business units to help them plan and conduct their portions of project work and to achieve their business objectives.

◾ Identify the project stakeholders in and around the relevant organization. Determine who is involved or otherwise has business interests in different aspects of project performance. Examine each stakeholder individually to see how well their business interests are achieved per their current alignment with projects. Develop recommendations for improved alignment of various stakeholders with relevant project efforts.

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Chapter 8

Facilities and equipment Support

Project managers have traditionally held general responsibility for obtaining and using the facilities and equipment required for each project effort. On larger, possibly geographically dispersed projects, the project manager could enlist the assistance of specialized business units within the relevant organization to obtain such resources, for example, facilities management, procurement, and contracting departments. Under the concepts of this project management office (PMO) function, the PMO will examine the opportunities in which it can intervene to oversee facilities and equipment within the project management environment. In so doing, it will facilitate better alignment of facilities and equipment acquisition, assignment, and disposal based on current and upcoming project requirements, thereby reducing a large part of the project manager’s burden in this area of responsibility.

This “facilities and equipment support” function enables the PMO to

◾ Establish a common project work space configuration ◾ Monitor, manage, and control facilities and equipment acquisition, use, and

disposition within the project management environment ◾ Optimize specific facilities and equipment utilization and assignment across

projects ◾ Reduce facilities and equipment expenses for individual projects

The PMO will be able to achieve these functional objectives by working closely with (1) project managers, to help them identify requirements for facilities and equipment as part of their physical resource planning, and (2) business units that

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currently provide this type of support to project managers. In turn, the PMO can establish the procedures necessary to requisition facilities and equipment for each project effort. This PMO function is inherently needed more in organizations that have significant or specialized project equipment needs and extensive project facil- ity requirements.

Project environment interface Concepts The PMO can use its comprehensive understanding of project management require- ments to plan and support facilities and equipment needs in the project management environment. This ranges from addressing individual project needs to establishing cross-project support capability for facilities and equipment.

In many cases, the relevant organization will have an existing capability to provide facility and equipment support, likely as two separate business functions. The role of the PMO is to bring that support into close alignment with project needs while serving the business interests of advanced planning and reduced costs. To that end, the PMO serves as an interface for project managers with such busi- ness support units, thereby reducing the project manager’s need to attend to such matters.

The PMO’s oversight of facilities and equipment can provide an important accounting function. If the nature of business is one that requires reusable special- ized equipment—for example, heavy equipment for construction, gauges and testing equipment for laboratories, and tool kits for hardware maintenance—the PMO can be the source for planning and allocating equipment use at the times needed by dif- ferent projects. Likewise, equipment for anticipated work across multiple projects can be procured in bulk to realize cost savings, in contrast to expensing equipment for individual projects at no cost benefit. Similarly, the PMO’s perspective across proj- ects will enable it to examine facility acquisition and assignment opportunities that maximize cost savings to the relevant organization and to the enterprise locally and worldwide.

Finally, the PMO performs a combined oversight and support role by ensur- ing that facilities and equipment within the project management environment adequately support project teams in their pursuit and achievement of project objec- tives. This includes identifying and acquiring the computing hardware and software needed to get the job done, as well as monitoring the needs for office space and office fixtures, furnishings, and equipment used by project team members. Again, this PMO support reduces the administrative burden and allows project managers to spend more of their time on direct project management efforts.

This PMO function is merely one of coordination for collocated project teams, where the business unit to which they are assigned inherently provides the necessary office space and equipment for the project team member. Conversely, where project teams are more transient—separate facilities needed at various locales for specific

Facilities and Equipment Support  ◾  219

client engagements, global-reaching projects requiring travel, frequent turnover of personnel assigned to the project effort—the PMO can play a facilitating role in helping project managers achieve project objectives while also monitoring business interests in the process.

Business environment interface Concepts The PMO can accomplish the “facilities and equipment support” function by being a coordinator and collaborator in the business environment. The intent is not to replace any current business unit functionality but, rather, to influence processes that are conducive to effective and efficient management of facilities and equipment within the project management environment. However, if there are no existing business-area processes that address facilities and equipment management to sup- port project efforts, then the PMO can play a lead business role in accomplishing this PMO function.

Presuming that there are current business functions within the relevant organi- zation that address facilities and equipment, the PMO’s primary responsibility will be to monitor the support provided to projects. To that end, the PMO can collabo- rate with in-house facilities and equipment support providers to help them achieve a better understanding of how their support activities impact project management requirements. Subtleties taken for granted in the project management environment are not always evident to nonpractitioners, and current support processes may not necessarily be conducive to effective project management. For example, the clas- sification and priority of a new project may influence equipment assignment, rather than an earlier-dated requisition request. Likewise, facilities that are available and can house two or three project teams may not be appropriate for such use if one of the project teams has contractual obligations for separate facilities to avoid a conflict of business interest. The PMO can monitor these conditions and help current sup- port providers understand the concepts and considerations of project management.

Facilities and equipment Support Activities across the PMo Continuum The “facilities and equipment support” function along the PMO competency con- tinuum provides increasing involvement in facilities and equipment management, as is applicable to projects within the relevant organization.

Table 8.1 presents an overview of the range of prescribed PMO facilities and equipment support activities according to each level in the PMO competency continuum.

The project office is responsible for requesting and managing the facilities and equipment needed to accomplish each project effort. This responsibility inherently

220  ◾  The Complete Project Management Office Handbook

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Facilities and Equipment Support  ◾  221

falls within the purview of the project manager, who must identify and submit requirements for facilities and equipment support to the PMO or other supporting business unit.

Midrange PMO levels help project managers to identify and achieve facilities and equipment support requirements on individual projects. The midrange PMO also will manage an effort to optimize the use and assignment—and potential reuse and reassignment—of project facilities and equipment across multiple project efforts as a means to make facility and equipment acquisitions and deployment more cost effec- tive for the relevant organization.

The center of excellence will continue its focus on business performance by con- ducting strategic-level analyses of the facilities and equipment support activities as a means of improving its effectiveness within the project management environment.

This PMO function implements the capability to provide effective facilities and equipment support within the project management environment. This includes establishing processes for the PMO and project managers alike to apply to the sup- port effort. To that end, facets of that process can be prescribed and incorporated into the project management methodology, as presented in the PMO “project man- agement methodology” function (see Chapter 1).

Facilities and equipment Support Function Model The PMO’s primary role can be either that of facilitator or that of manager of facili- ties and equipment support within the project management environment. If busi- ness units within the relevant organization already conduct such support, the PMO should facilitate alignment and integration of business and project management processes. If such support is not readily present or fully supportive of interests in the project management environment, the PMO can be more proactive in implement- ing facilities and equipment support solutions, but always consistent with established practices and coordinated with appropriate existing business support functions.

This PMO function is generally applied within organizations that have large project team populations. It centralizes the management of facilities and equip- ment across multiple project efforts, thereby alleviating some of the management burden of individual project managers. The project manager is still responsible for identifying facilities and equipment requirements, but with this PMO function, the manager can submit a request for fulfillment to the PMO. In turn, the project manager resumes responsibility for managing assigned use of project facilities and equipment. At a minimum, the PMO can perform oversight and provide facili- ties and equipment support, as needed, even for organizations with smaller project team populations.

The prominent activities of the PMO’s “facilities and equipment support” func- tion model are depicted in Figure 8.1. Each activity is described in the following subsections.

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Establish Project Team Requirements The PMO serves in a capacity to (1) examine and validate project team work space requirements in conjunction with project managers’ input and requests, (2) man- age fulfillment of requirements either through direct action or by passing the requirements to the appropriate business unit within the relevant organization, and (3) monitor fulfillment actions. As well, the PMO can represent project manage- ment environment work space needs to facility managers and to senior manage- ment. This activity enables the PMO to ensure that project team performance is supported by adequate work space and equipment needed by individuals respon- sible for project management and task performance.

The PMO may have to apply special consideration and adjust the prescribed approach if work space setup support is provided to geographically separated work teams or those operating in a virtual team environment.

Establish Work Space Requirements

The PMO should evaluate existing working conditions to determine whether the work space for the project team members is adequate for current and near-term project team requirements. In general, this is an evaluation that can be formally or informally conducted by the PMO on a recurring, perhaps annual, basis. It pro- vides the PMO with sufficient insight into workplace conditions to enable mean- ingful deliberation and discussions in support of the work space requirements to be pursued.

The PMO can then proceed to develop a set of recommended work space fea- tures that are desired within the project management environment. Things to con- sider include

◾ Preferred individual work space dimensions (area): The size of various work spaces needed, consistent with organizational standards, roles and responsi- bilities of project team members, and nature of project work.

◾ Preferred work space enclosures: Requirements for office space for different purposes, including offices for managers or others requiring levels of privacy

Establish work space requirements

Establish Project Team Requirements

Manage Project Facilities

Manage Project Equipment

Manage equipment acquisition

Monitor equipment disposition

Monitor equipment assignments

Manage facility acquisition options Monitor facility utilization Monitor facility disposition

Establish equipment requirements

Figure 8.1 “Facilities and equipment support” function model.

Facilities and Equipment Support  ◾  223

due to the nature of their work; enclosed rooms for meetings, storage, or a library; offices, cubicles, or open work space for project team members; labo- ratory rooms or enclosures; and work space for visiting project participants. As well, this work space feature considers break rooms, needs for special ven- tilation or other types of climate control, utility (e.g., electricity, water, etc.) requirements, the need to accommodate access for handicapped participants, and the necessity to fit any (furniture-size) project equipment.

◾ Furniture and furnishings: Presents the need for desks, workbenches, work stations, chairs, tables, bookcases, lamps, and so forth, again consistent with organizational standards, the roles and responsibilities of project team mem- bers, and the nature of the project work.

◾ Work space access requirements: Identifies the need to control access to the project team work area or facility. This also includes a description of any information, security, or work safety–based protective requirements for indi- viduals, equipment, and materials associated with project work efforts. This feature specifies access requirements and provides the preferred (or required) means of access control.

The PMO can compile and recommend the acquisition and assignment of proj- ect team facilities that have the preferred work space features, or it can validate that current facilities are adequate to support the projects involved.

The PMO should monitor facilities utilization and configuration during and between recurring work space examinations. The following are several facility uti- lization factors for the PMO to consider as it provides ongoing management of facilities and equipment support:

◾ Project team number and average size ◾ Project team member population ◾ Project manager population ◾ Project manager alignment with number of project teams ◾ Project team (and team member) locations

This effort will produce results that vary significantly by organization and by industry. In some cases, a handful of project managers will be aligned with a few proj- ect team members, and generally, all are collocated in one facility. In other cases, this may expand to configurations of many project managers, hundreds of project team members, and multiple project team locations. The simpler configuration will likely require the PMO to be more attentive to details of the support provided. The latter configurations provide more opportunity for the PMO to play a larger role in manag- ing facilities and optimizing their use across the larger number of project teams.

The PMO should prepare a fundamental recommendation document for work space requirements by project team or a general recommendation by individual. The more advanced PMO may incorporate this document into a broader organizational

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facilities plan for how project team facility requirements will be implemented across the relevant organization.

Establish Equipment Requirements

The PMO should develop fundamental guidance and recommendations for the equipment needed by individual project managers and project team members, per the technical and professional nature of the types of project work they perform. This might be identified as a standard equipment package. Then, the PMO also should identify equipment shared by all members of the project team—usually within a business office environment. Finally, the PMO should identify any special equipment needed by one or more project teams to accomplish project work.

An overview examination and checklist for these three types of equipment requirements are presented below. Each PMO must consider the history of project team equipment provisioning and current needs as it prepares its requirements and recommendations for each equipment group within the project management envi- ronment. As well, it is not presumed that such equipment support is not currently provided by another business unit. For example, the information technology (IT) department will usually support individual and group office equipment, and other business units may support specialized equipment. However, now the PMO uses the information it compiles to improve and optimize equipment assignment and utilization support across project teams.

Individual Equipment Requirements

The PMO can consider items in the following list in creating a standard equipment package for the project team. Note that some project teams and team members are generally office based, while others may be field based. The PMO’s recommendations should take into account the different equipment needs relative to these project venues.

Computer — Today’s project management environment inherently requires con- sideration of individual computer equipment, which includes

◾ Desktop computer ◾ Laptop computer ◾ Personal digital assistant (PDA) ◾ Computer docking station/cradle (for laptops and PDAs)

Consideration of this equipment includes any necessary peripheral equipment such as monitor, keyboard, modem, network card, CD-ROM/diskette readers, and so forth. Assignment of this equipment also implies connectivity to a network within the relevant organization for purposes of internal and external communica- tions and access to the Internet.

Facilities and Equipment Support  ◾  225

Software — This is a standard set of software that can be prescribed for users on the project team, including the following items:

◾ Business suite applications (e.g., word processor, spreadsheet, database, pre- sentation manager, etc.)

◾ Communications applications (e.g., e-mail, Web browser, contact manager, collaboration tools, etc.)

◾ Project management applications (e.g., cost–schedule–resource manager, task manager, project information dashboard, methodology process manager, etc.)

◾ Document reader applications (e.g., text file reader, drawing/computer-aided design [CAD] file reader, etc.)

Although not particularly an equipment item, the PMO may want to consider access (and any associated cost) to technical and business Internet locations in asso- ciation with use of any Web-based applications, including membership or subscrip- tion requirements. In general, access to the Internet and to the home office network is a feature to consider.

Individual Office Equipment — This is a general set of equipment that facili- tates individual project work performance and business communications that can be considered, including the following:

◾ Desktop telephone ◾ Mobile telephone (cell phone) ◾ Mobile pager ◾ Two-way radio ◾ Voice-mail recorder/mailbox ◾ Desk, chair, and associated office furnishings ◾ Individual work document and media storage containers (file cabinets)

The specification and assignment of individual office equipment, to a large extent, will be influenced by the culture and practices of the relevant organization. The PMO should carefully examine its recommendations for any equipment that exceeds those norms.

Individual Special Equipment — This is a set of equipment determined by the nature of business and project requirements that is considered for assignment to individuals because of personal or professional need or frequency of use, including the following:

◾ Personal health and safety devices ◾ Tool kits ◾ Measurement devices

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◾ Writing and marking instruments ◾ Calculators and special computing devices ◾ Equipment and document travel cases ◾ Special work apparel/clothing

The PMO will need to examine special equipment utilization to determine whether assignment to individuals is warranted.

Project Team Office Equipment Requirements

The PMO can consider items in the following list when creating equipment rec- ommendations for a standard project office, that is, for a collocated project team. The items below generally represent office equipment types that can be shared by all project team members. However, in some cases they also may be issued as indi- vidual equipment:

◾ Document printer (computer peripheral) ◾ Electronic plotter (computer peripheral) ◾ Power surge protectors ◾ Facsimile machine ◾ Reproduction/copy machine ◾ Document scanner ◾ Workbench or laboratory table ◾ Technical manuals (issued as equipment in some environments) ◾ Team work document and media storage containers (file cabinets) ◾ Meeting room table, chairs, and associated furnishings ◾ Drawing and writing boards ◾ Audiovisual equipment ◾ First-aid/emergency kits and equipment ◾ Trash receptacles, including document-destruction equipment

This listing provides a preliminary consideration for items that create a basic “project office” equipment configuration. The PMO should collaborate with project managers to determine if there are any other team office equipment requirements unique to current or planned projects.

Special Equipment Requirements

The PMO can consider the generic items in the following list as a guide for pre- paring its recommendations for special equipment that is normally shared across project teams. It should examine the nature of project work and collaborate with relevant project managers to finalize these requirements. As well, these items gen- erally represent “nonoffice” equipment that is assigned for project team use on an

Facilities and Equipment Support  ◾  227

as-needed basis and subsequently returned to centralized control for scheduled use by another project team:

◾ Personnel transportation vehicles ◾ Heavy equipment (e.g., construction equipment and vehicles, large hardware/

product installation equipment, etc.) ◾ Unique (and sometimes very expensive) calibration and measurement devices ◾ Special-purpose tools/tool kits ◾ Additional/spare computing equipment and peripherals ◾ Mobile operations equipment ◾ Field operations equipment

Again, the PMO should collaborate with project managers and technical team leaders to establish a specific special equipment requirements list for the relevant organization.

Manage Project Facilities The PMO begins this effort by identifying facility needs and requirements across the various projects. The PMO can then concentrate on developing the processes for their acquisition, utilization (assignment), and disposition. This necessitates having a fairly comprehensive understanding of project team strength, project team locations, and project durations for all current and upcoming projects across the relevant organization.

The PMO can then proceed to review current facility utilization to determine whether it is sufficient for project team needs or whether it can be optimized for multiple project team use. As well, the PMO should identify pending projects with known or anticipated start dates as a means to plan upcoming facility needs.

Presumably, there will be an existing facilities management function within the relevant organization. If so, the PMO plays a role to ensure that the needs of the project management environment are met through coordination of the project facility requirements with the planned facility assignment actions of the facility manager. Conversely, the relevant organization may not have a facilities manage- ment function that specifically addresses project team requirements. In this case, the PMO should become a more visible influence on facility oversight within the project management environment. PMO involvement is likewise appropriate in situations when project facility management is associated with distinct customer engagements, where facility costs are associated with one or more project efforts, or where customer-provided facilities require a measure of project manager oversight.

The depth of facility management conducted by the PMO can be adjusted to fit the needs of the relevant organization. However, it is essential to note that the activities prescribed below are not intended to replace any organizational facilities management function or to make the PMO an expert in facilities management.

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Rather, this guidance is provided so that the PMO can assist or guide the project manager—while collaborating with the in-house facilities management experts— in conducting project facilities management with regard to the interests of the proj- ect management environment.

The following subsections prescribe three fundamental areas of project facility management that the PMO can consider when establishing project facilities sup- port processes within the relevant organization.

Manage Facility Acquisition Options

The PMO, with an eye on all projects within the relevant organization, should review the different facility acquisition options that have been undertaken to pro- vide current project facilities, examine effectiveness to date in supporting project facility needs, and develop recommendations for the approach to future project facility acquisitions.

The PMO can consider the benefits and drawbacks of the following four acqui- sition methods when evaluating and recommending facility needs for current and future projects.

Collocation

This approach to facility acquisition is likely the most common situation the aver- age PMO will encounter. It simply represents planning and acquiring work space for the project team in existing facilities within the relevant organization. This is the default facility assignment for individuals who are assigned to business units but who also contribute time on one or more project teams. Their work space is rela- tively permanent, regardless of the project work they may be assigned. The PMO usually plays a negligible role in influencing business unit work space assignments.

However, the PMO’s attention to the collocation method could also mean acquisition of work space within existing relevant organization facilities for use by project teams, where members of a cohesive project team are collocated in a com- mon office or work space. As this is a preferred project management practice, the PMO’s role is to recommend and facilitate such arrangements, as needed by project teams.

The PMO may also encounter another collocation arrangement—that of col- location at an existing customer’s facility. This is a common practice, but it does require the attention of the project manager and oversight of the PMO to ensure that any associated contractual obligations for facility use and management are satisfied.

In this facility acquisition method, the PMO plays a primary role in helping the project manager to identify work space that is available for collocation of proj- ect team members. Normally, there is no direct cost to the project effort when

Facilities and Equipment Support  ◾  229

acquiring collocated facilities for the project team. However, there is a cost to be accounted for in the overhead of the organization supplying the facilities.

Lease

This approach to facility acquisition is often used by rapidly expanding project teams to accommodate the influx of new project team members. It is also a solu- tion for setting up project team operations at locations that will be staffed for only a fixed period of time, usually the duration of the project. The PMO’s role in this acquisition method is to validate the need for and the conditions of the facility lease. This involves close collaboration with the project manager to deliberate acquisition options and decide on a course of action.

A few of the more prominent issues to consider in deliberating leasing arrange- ments for project team facilities include

◾ Leasing cost: Will the cost be expensed as a project budget item or as overhead? ◾ Leasing period: What is the period of the lease relative to the period of the

project; can the lease be terminated if the project is terminated early; can the lease be extended if the project is extended?

◾ Leasing conditions: What facility maintenance and management responsibili- ties are incurred by the lease; do they represent significant cost items for the project?

◾ Leasing contract: Who will manage the leasing contract and monitor associ- ated compliance; what are the lease payment arrangements; who will make payments and when; what are the penalties and remedies for noncompliance?

◾ Facility renovation: Does the lease account for any required renovation or reconstruction within the facility; what effect do such requirements have on the leasing cost or the period of the lease?

The PMO should be involved in lease deliberations that accommodate project team operations, but it must always seek the advice and counsel of experts and professionals within the relevant organization, for example, legal department, con- tracting department, and so forth.

Purchase

This approach to facility acquisition is one that normally represents a business deci- sion to conduct a capital program. It is characterized by a cash outlay or other fund- ing approach to obtain the preferred existing building, structure or work space. The PMO will need to understand the ramifications of recommending this type of project facility acquisition. However, it can confer with strategic planners, legal staff, and facility management experts during its deliberation.

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In general, the PMO should be involved in project facility purchase deci- sions when long-term project management facility requirements are identified. Its primary role will be to validate or support the need for a facility purchase. This approach may be considered when there is a need for permanent offices for project team members, or when a particular project or program has a definitive need and an appropriate funding source has been identified to warrant the facility purchase.

Build/Develop

This approach to facility acquisition has PMO deliberation impacts similar to those encountered in a purchase. It too is a business decision that is likely to be a capital program. However, deliberation requirements are enlarged by the need to evaluate architectural, engineering, and construction facets of the acquisition method. The result of this effort is the construction of a new facility.

The PMO will primarily serve in an advisory capacity for this type of project facil- ity acquisition. It should be involved to represent the interests of the project manage- ment environment and to participate in facility space allocations for project teams. This method of facility acquisition is normally considered in response to the longer- term strategic needs of the relevant organization.

Monitor Facility Utilization

This activity provides the PMO with the means to examine facility utilization across all projects within the relevant organization. It has three fundamental objec- tives, which are presented below.

Ensure Adequacy of Facilities

The PMO should ensure that current facilities adequately support the effectiveness and efficiency of project team work efforts. This includes examining conditions of both separated and collocated project team members and ascertaining impacts on project performance. In particular, the PMO should identify where project team members have work spaces away from each other to the detriment of project per- formance capability.

The insight from this examination will enable the PMO to devise an approach and formulate recommendations for project facility management within the relevant organization. In turn, the PMO will also gain a fairly complete understanding of project team facility requirements. This will be a valuable PMO information asset, even if PMO recommendations are not immediately implemented. This informa- tion will allow the PMO to advise project managers across the relevant organization regarding planning for utilization of the project team facility. It also will allow the PMO to advise senior managers and to contribute to senior management decisions regarding facility requirements that support effective project performance.

Facilities and Equipment Support  ◾  231

Optimize Facility Utilization

The PMO’s examination should prompt an analysis of ways to optimize facility uti- lization for the project team. This is not likely to be a concern for the PMO serving a small number of collocated project teams. However, the PMO that has a larger num- ber of project teams located across an expanded area, perhaps one with global respon- sibility, will benefit from reviewing the following facility utilization considerations:

◾ Identify availability of work space in currently assigned project team facilities ◾ Identify overcrowding in work space in currently assigned project team facilities ◾ Identify projects having multiple locations for assigned project team members ◾ Identify projects that have dedicated, collocated work space for project team

members (i.e., project office configuration) ◾ Identify disparity in project team facility assignments (i.e., number of project

team members versus available work space for key projects) ◾ Identify project team facilities approaching end of assignment and those

available for reassignment ◾ Identify facilities where associated leases or contracts have become a manage-

ment burden, so as to warrant early or at least timely termination of use ◾ Identify facilities where maintenance requirements and associated costs have

expanded beyond desired limits

An examination of these factors should provide indicators of opportunities for optimizing the assignment of facilities used by project teams. This could include

◾ Collocating multiple project teams in the same existing facility to dispose of unneeded facilities and reduce overall facility costs in the project manage- ment environment

◾ Moving project team members from dispersed business unit work spaces to a dedicated project office environment

◾ Making work space available at existing facilities in dispersed geographical locations or regions for individual project team members or small teams asso- ciated with different projects

◾ Acquiring project team facilities in a dispersed location to accommodate indi- vidual project team members or small teams associated with different projects

The PMO does not necessarily have to recommend or make abrupt facility assignment changes, but it can compile indicators that can be applied to improve facility acquisition and assignment management in the future.

Plan Future Facility Utilization

The PMO should have the combined awareness of current facility availability and knowledge of new projects about to begin. This information can be used to conduct

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facility planning to support each project effort. The PMO can work with the rel- evant project manager to identify project team facility needs and then recommend and pursue a course of action for acquiring and assigning preferred project team facilities.

The PMO might consider establishing a tracking system for such facility man- agement, which is particularly valuable if there is frequent project facility turnover within its purview. Even if the PMO does not directly own or manage a facility, it will enhance its support capability to project managers by knowing the availability within existing facilities and the acquisition options that are immediately available to the project. Ideally, a PMO involved in facility management activities will be proactive in preparing a plan that recommends the facility acquisition and assign- ment course of action for upcoming projects.

Monitor Facility Disposition

In conjunction with monitoring and tracking facility utilization, the PMO can develop plans and recommendations for facility disposal, that is, what to do with the project team facility (or work space) when the project team is finished using it.

The end result of monitoring facility disposition is that it gives the PMO reli- able information regarding the availability or nonavailability of existing facilities that have been used by project teams. The PMO’s tracking process can be formal or informal, but it should represent an appropriate level of effort that will enable the PMO to support project managers’ requests for project team facilities within the relevant organization.

The PMO active in management of project team facilities should be prepared to make or recommend facility disposition decisions, including consideration of the prominent disposition options outlined below.

Continuity of Use

An “established” project team is recognized as a group that pursues one or more project efforts as a coherent group and does so on a more or less ongoing basis, tak- ing on new projects as they emerge. In such cases, there is no particular need to dispose of the facility or discontinue its assignment to the established project team. The PMO identifies the approximate period of extended use, or it designates the facility as a “permanent” facility assignment for the established project team and tracks its utilization accordingly.

Reassignment

An existing project team is preparing to disperse at the end of the current project effort and will vacate the facility. The assignment to that project team will be dis- continued, and the facility will be made available for utilization by another project

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team or another business purpose. The PMO identifies the planned discontinuation of facility assignment, coordinates end-of-use date with the project manager, and includes the facility in considerations for assignment to another project team based on period of availability and the project team’s needs. The PMO tracks its reas- signment, and if facility reassignment cannot be specified in a reasonable period of time, alternative facility disposition actions should be considered.

Administrative Return to Landlord

An assigned project team that is using a “borrowed” facility is dispersing, and con- ditions of occupancy require the facility be returned to the relevant facility man- ager at the conclusion of the assignment. If the facility is considered for follow-on use after the current project team vacates, the PMO or project manager may have to negotiate an extension to continue facility use. Otherwise, this situation warrants return of facility (or work space) control to the relevant facility manager, and this usually involves some administrative activities to document that return transfer of responsibility. The PMO should track the transfer activities that are conducted to ensure that all conditions of use and facility closeout have been satisfied. It can then remove the facility from its facility tracking list.

Conclusion of Leasing Arrangement

This disposition option arises from either dispersal or relocation of the project team from a leased facility. If the facility is considered for follow-on use by another proj- ect team, the leasing agreement is simply reviewed to ensure that such an assign- ment is covered, and any needed adjustments to the lease are then negotiated and implemented to accommodate the new project team. Lease closeout could be com- pounded by the need to address issues of lease compliance and duration of use, and the project manager or PMO should use available legal advisors and facility man- agement professionals to lead that type of effort. Otherwise, the facility is simply returned to the owner, and the PMO monitors lease closeout activities to ensure a timely and distinct return of property responsibility. It can then remove the facility from its facility tracking list.

Deactivation

Deactivation occurs when a project team facility is vacated but is not otherwise dis- posed of. This sometimes results when facility managers take action to shut down the facility pending management decisions for its further use. Or, the facility could be taken out of use for major maintenance, refurbishment, or add-on construction. The PMO will need to track the status of a deactivated facility and bring it back to consideration for project team assignment when the facility is again activated for utilization, assuming that it is again made available for project team assignments.

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Transfer of Ownership/Property Sales

A project team facility, vacated or not, may become available for sale. The PMO should be positioned to learn about such organizational decisions as a means to assist in project team relocation, if necessary, or to simply recognize nonavailability of a particular facility for future planning of project team work space.

Destruction

Similar to a property sale, a project team facility, vacated or not, may become slated for destruction. Again, the PMO should ensure that it is notified of such organiza- tional decisions regarding facilities used by project teams. The PMO will then note future nonavailability of the facility, but it may also want to pursue any intentions to replace the facility through construction of a new facility. However, the PMO may need to assist the project manager in relocating an occupying project team if facility destruction is scheduled prior to completion of the project team’s current assignment.

Manage Project Equipment The primary purpose of PMO involvement in equipment management is to opti- mize the use and assignment—and potential reuse and reassignment—of project equipment across multiple project efforts as a means to make equipment acquisi- tions and deployment more cost effective for the relevant organization. For example, a single, expensive piece of equipment (e.g., special tool or precision measurement device) can be obtained and shared across projects to reduce the expense instead of replicating equipment purchases for each project. Savings can be realized if a centralized authority such as the PMO can manage and control that equipment. Similarly, project expense can be reduced when multiple pieces of equipment (e.g., laptop computers) can be purchased in volume. The PMO can be instrumental in achieving these types of benefits.

There are three primary activities prescribed for PMO involvement in equip- ment management. The PMO can use the guidance provided for these activities to establish a process for managing and tracking equipment acquisition, assignment, and disposition within the project management environment.

Manage Equipment Acquisition

The PMO should establish a process that enables it to manage or otherwise influ- ence equipment acquisition for project team use. Equipment acquisition includes both equipment purchases from external sources (vendors and retailers) and inter- nal transfer of equipment within the relevant organization for use in the project management environment.

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This activity focuses on the PMO’s efforts to acquire equipment for use by project team members. The following fundamental process steps are recommended.

Inventory Current Equipment

This process step provides information regarding what equipment is currently avail- able for assignment within the relevant organization. This includes equipment that is under PMO control pending assignment, equipment that is under the control of other business units and available for assignment, and equipment that is currently assigned to projects or project team members. In other words, the inventory identi- fies equipment that is known to exist within the relevant organization that is or can be assigned to project efforts. The equipment inventory should include some essential information about each item. For example:

◾ Equipment nomenclature (e.g., equipment name, brand, description, units, etc.) ◾ Equipment type (e.g., technical, office, tools, vehicle, heavy equipment, etc.) ◾ Equipment purchase information (e.g., purchase date, vendor/retailer, cost, etc.) ◾ Equipment information (e.g., tag number, current value, disposal method, etc.) ◾ Equipment maintenance record (e.g., warranty, maintenance action, date, etc.) ◾ Equipment storage location (e.g., PMO, business unit, facility name, etc.) ◾ Equipment status (e.g., ordered, received, available for use, assigned, disposed

of, etc.)

The inventory list and associated equipment information can be as detailed as needed to help the PMO achieve its responsibilities for managing project equip- ment. This inventory will also aid in subsequent analyses of equipment acquisition needs by indicating what equipment is currently on hand versus what needs to be acquired.

Identify and Acquire New Equipment

This process step guides PMO activities regarding how equipment can be acquired for use within the project management environment. The level of PMO authority in approving and funding equipment purchases will dictate the need to extend this process for use at higher levels of funding authority. Note also that equipment acquisition is not necessarily a purchase. It also includes the process that makes equipment within the relevant organization available to project teams. This means that the PMO will collaborate with other business units to identify equipment and to negotiate potential equipment assignments for project team use. Sometimes, equipment purchases will be achieved through the efforts of another business unit, usually per PMO or project manager requests and with PMO follow-up tracking of the acquisition.

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Presumably, the business units of the relevant organization are already provid- ing timely equipment acquisition support to satisfy project requirements. For exam- ple, construction projects are likely already getting heavy equipment support from that department; project team members are getting computer equipment from the IT department; and precision equipment is made available for projects by still another department. In such cases, the PMO is simply trying to quantify and document equipment availability for assurance purposes and with consideration for the inter- ests of the project management environment.

This process should include the PMO’s consideration of the following activities:

◾ Use equipment utilization analyses to identify needs for equipment replace- ment or refurbishment.

◾ Use equipment utilization analyses to identify needs for additional or new types of equipment.

◾ Review equipment requests from project managers and project team mem- bers to identify needs for additional or new types of equipment.

◾ Convene a formal or informal equipment acquisition review group to validate new equipment acquisition requirements; forward the acquisition request either to the appropriate funding authority or to the business unit that rou- tinely acquires and manages the type of equipment requested.

◾ Conduct negotiations and manage internal equipment acquisitions. ◾ Track equipment acquisition progress, any purchase activity, and equipment

receipt.

Update the Equipment Inventory

This activity prompts the PMO to add any newly acquired equipment to the equip- ment inventory list maintained by the PMO.

Inventory management is usually a part-time task or one associated with a PMO staff role. Inventory management should not be burdensome. Therefore, when pos- sible, an inventory list should be generated by a business unit that normally moni- tors equipment acquisition. The PMO’s equipment inventory list can be compiled using such transferred information.

Otherwise, the PMO should create and regularly maintain an equipment inven- tory list for use within the project management environment.

Manage Equipment Assignments

The PMO will likely defer responsibility for management of major equipment assignments to the relevant business units. However, it probably should be cogni- zant of equipment assignments just as a matter of building its awareness of equip- ment utilization within the project management environment. However, in some organizations, the PMO may be assigned responsibility for management of project

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team equipment, particularly the standard equipment associated with the technical nature of project work efforts.

This activity addresses PMO equipment management relative to the several rec- ommended steps presented below. Project managers and project team members, as well as the PMO, are encouraged to perform these steps within the project manage- ment environment.

Identify and Issue Standard Equipment

The PMO should identify essential equipment needs of project team members in the relevant organization. When new personnel are introduced as project team members, the PMO can automatically prepare and issue a standard equipment package to those individuals. This is an action that is normally accomplished for personnel assigned full time to project teams and not for casual or part-time project team members. The latter can obtain any needed equipment through the subse- quent equipment assignment steps described below.

Manage Equipment Requests

The PMO should develop an equipment request process that can be used to identify any special project equipment needs. This can include a form prepared by the proj- ect manager and submitted for PMO review and action during the planning phase of the project management life cycle. This process can be incorporated into the activities specified by the project management methodology. The process should specify how equipment needs can be requested at the discretion of the project man- ager or individual team member.

Manage Equipment Request Actions

The PMO can review, validate, and record the equipment request. If the request contains equipment under the control of the PMO, it can authorize the assignment. If the request is for equipment available outside the PMO, it can either forward the request to the appropriate business unit equipment provider and track request fulfillment or return the reviewed request for project manager submittal action. If the PMO merely tracks equipment requests and does not become involved in authorization or fulfillment, this process step can be shortened to having the proj- ect manager provide an information copy of the equipment request to the PMO at the same time it is submitted to the equipment provider.

Monitor Equipment Assignments

The PMO should establish the means to identify and track equipment assign- ments, including equipment fulfillment actions not conducted by the PMO itself.

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This involves documenting what equipment has been assigned to which project team or individual. It includes specification of the assignment date for all equip- ment as well as specification of the planned return date for “borrowed” equip- ment. It may also include specification of pending assignment dates for selected types of equipment. This information can be used to analyze equipment utili- zation and to forecast future equipment needs within the project management environment.

Manage Equipment Disposition

In general, the PMO will need to identify equipment assignments as either perma- nent or temporary. Permanent equipment will normally remain with individuals throughout their tenure with the relevant organization or with the project team or project office (assigned to the project manager) as long as it is engaged in conduct- ing one or more projects. Some permanent equipment may be replaced over time, and the PMO will want to note such changes in major assignments of equipment. Otherwise, permanent equipment is usually not returned to PMO or other business unit custody until the individual’s association with the project has ended or the project team has dispersed.

Temporary equipment will normally be provided to individuals or project teams for a specified period of time, after which it is returned to the original custodian upon completion of use. It should be noted that temporary equipment could be assigned for extended periods of use, which further warrants keeping track of such equipment assignments.

The equipment assignment process should include instructions to users regarding the preferred disposition of equipment upon fulfillment of its purpose. Individuals and project managers should confirm the disposition actions with the PMO or the equipment custodian as the equipment assignment period ends. The disposal option applied for each equipment assignment should be noted by the assignment tracking process and annotated on the equipment inventory list, as appropriate. Several options for equipment disposition that can be applied within the project management environment are presented below.

Equipment Discard

This form of disposal is used when equipment issued does not require return to the PMO or central custodian. This disposal option is normally used for equipment that results in sufficient wear and tear, or other reduction in performance over time, so as to preclude the need for its return. The project manager or individual then has responsibility for equipment removal, destruction, or other forms of disposal. This discard option should be cost effective for the type of equipment affected; other- wise, a more cost-effective disposal method should be considered.

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Equipment Return

This form of equipment disposal requires accounting and return to the PMO or equipment custodian. This method could include an examination of the equipment to ensure that it was properly maintained and used. In particular, this method requires the user to return the equipment for reuse by another person or project team. The PMO or custodian will normally track equipment returns by annotating the inventory list to show equipment status as accounted for and available.

Equipment Transfer

This form of equipment disposal is more or less an administrative exercise associated with equipment assignment tracking. It is used when individual accountability for equipment is transferred as a result of personnel changes, but it does not necessarily represent a change in the purpose of equipment assignment. For example, this dis- posal method usually pertains to equipment assigned to project managers for project team use, and it is applied when one project manager is transferred and replaced by another. The new project manager then receives accountability for the assigned equipment. This method of disposal does not normally apply to equipment assigned to individual project team members.

Equipment Loss

This form of disposal accounts for premature loss of assigned project equipment due to misplacement, theft, or inadvertent damage or destruction. These conditions obviously make the equipment unavailable for use and may require replacement action. This disposal method is identified to the PMO or equipment custodian as soon as the condition becomes known. This allows any relevant guiding policies to be implemented (e.g., investigation, law-enforcement notification, security-control notification, etc.) and for the equipment assignment process and inventory list to be updated. Certain conditions of equipment loss, per project needs and business priorities, may trigger the assignment of replacement equipment.

Postscript for the Smaller PMo The activities of this unique PMO “facilities and equipment support” function are ones that are generally performed by existing business units. Only the more advanced PMOs, particularly those having a global or enterprise-wide scope of responsibility, are likely to need an intensive facilities and equipment control pro- gram. However, all PMOs should develop a fundamental facilities and equipment support capability as a means to make equipment acquisition, assignment, and

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disposition decisions in the project management environment that are responsive to project needs and to the business interests of the relevant organization.

To that end, the smaller PMO serves as a representative of project management environment equipment needs, and it should concentrate on the collection and analysis of equipment utilization information as the basis for that representation. It can perform facilities and equipment support, and thus achieve the necessary representation, by addressing the following prescribed activities:

◾ The PMO should develop a general perspective on the needs of the project management environment facility so that it can analyze current project facil- ity use and forecast future project facility requirements.

◾ The PMO should develop insight, if not a specific list, of prominent equip- ment used by all project teams. It should be able to discern, through col- laboration with project managers and project team members in the field, whether present equipment adequately supports each project. It can then lead efforts in the business environment to identify and acquire equipment that is required or that will improve project team performance.

◾ The PMO should review the current assignment processes for project facilities and equipment. It can identify facility providers and equipment custodians and then collaborate with them to optimize processes for project manage- ment and business benefit. In turn, the PMO should incorporate the estab- lished approach for acquisition of facilities and equipment into the project management methodology that is deployed for project manager use.

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Chapter 9

Resource Management

Resource management in the project management environment takes on as many different configurations and approaches as there are organizations and project man- agement offices (PMOs). Mostly, project resources are introduced to projects through matrix management, where a resource manager in the relevant organization “lends” individual resources to project managers for specific project efforts. In some organiza- tions, resources are assigned directly to the project manager, who then serves as the resource manager. To a lesser extent, a few organizations have all project resources assigned to the PMO.

Regardless of the approach used across industries and organizations, there are two fairly common and generally accepted views about project resource management. First, the human resources (HR) department serving the relevant organization has ultimate responsibility and overriding authority for resource management, and it directs, guides, or otherwise facilitates the resource manager in managing and super- vising organizational resources. Second, the PMO must be able to influence the qual- ity and availability of resources used on projects, and it should be able to oversee or at least monitor resource utilization in the project management environment. These two premises will be applied to this PMO “resource management” function model.

The “resource management” function enables the PMO to

◾ Assist the HR department and resource managers in acquiring and qualify- ing resources

◾ Develop guidance for managing project resource assignments and performance ◾ Evaluate overall effectiveness of project resource performance

To reiterate, the PMO will accomplish these activities through close coordina- tion and collaboration with the HR department and relevant resource managers.

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Project environment interface Concepts The PMO can be the primary interface between the project management environ- ment and the resource managers in the relevant organization. This takes some of the burden for resource acquisition away from project managers until their input and decisions are ultimately needed. The PMO’s understanding of project manage- ment and technical disciplines, combined with frequent examinations of project performance, enable it to guide or recommend processes for project resource man- agement, to include establishing the resource acquisition and assignment processes that can then be used by all project managers.

The PMO also can serve as the interface between the project management environment and senior and executive managers for matters involving oversight of project resources. A PMO that is involved in resource management will be more adequately prepared to assist senior management in its responsibilities for resource allocation, for example, in such processes as project portfolio management. The more advanced PMO also can be involved in forecasting resource requirements to ensure that senior management has the resource strength to meet the demands of projects expected to be undertaken in an upcoming period of time.

The PMO can assist and guide project managers in their deliberation and selection of project resources, making recommendations from an informed perspective. In par- ticular, the PMO might have insight into resource availability that can be introduced to resource planning efforts. It also can serve to develop and present project resource per- formance standards and requirements that are applied across all projects and used by all project team members. And finally, by developing procedures for project manager use, the PMO can guide project managers in dispersing project teams at the completion of a project or in managing individual departures from the project team during the project.

The PMO can facilitate the introduction of part-time and temporary project team members into the project management environment. In particular, it can develop procedures for project managers to help individuals acclimate to the proj- ect assignment. In some organizations, this may be rote for project team members who are accustomed to participating in one or more projects outside their business unit. However, the PMO may consider reviewing and formalizing this process to ensure an effective approach for all parties involved. In other cases, the process for introducing new project team members may simply be incomplete, thus war- ranting further PMO examination. The need to introduce individuals to project assignments applies as well to full-time resources, where the PMO can contribute a standard approach for what is accomplished to deploy resources to each project.

Business environment interface Concepts The PMO can serve as an implementer of HR department guidance in the project management environment. This is an effort that business units in most organizations

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already perform, and it is an appropriate action for the PMO whether it is itself a resource manager under a strong matrix or integrated project team structure or is simply coordinating the activities of resource managers within the relevant organi- zation as a result of having a weak matrix project team structure. See more infor- mation about project team structures in Chapter 7, “Organization and Structure.”

The PMO is ideally situated, and presumably authorized, to coordinate project resource use with resource managers across the relevant organization. It can serve as a source of information and endorsement for resource managers who are essentially external to the project management environment. A prominent role would be for the PMO to educate resource managers on project resource needs, demonstrating that “loaned resources” are not a loss to the resource manager but, rather, a gain to the relevant organization’s project efforts. It can further illustrate how the matrix management approach is intended to serve the project management environment as well as the business unit. As well, the PMO can assist in monitoring both project manager and resource manager commitment of resources to project efforts. It also can formalize the process and monitor individual resource commitments to project assignments according to the practices established in the relevant organization.

Resource Management Activities across the PMo Continuum The “resource management” function along the PMO competency continuum is characterized by expanding influence and control of project resource assignments and performance. The PMO’s responsibility ranges from facilitating and moni- toring resource assignments from an awareness perspective to being involved in managing project resource acquisition, assignment, deployment, performance, and assignment closeout.

Table 9.1 provides an overview of the range of prescribed PMO resource man- agement activities according to each level in the PMO competency continuum.

The project office uses established organizational practices to request, assign, and manage project team resources. In the absence of a higher-level PMO, it will need to communicate and collaborate requirements directly with resource manag- ers and gain their commitment to provide the project resources needed for each project effort. The project office will further collaborate with resource managers to determine responsibility for evaluating and reporting project resource performance.

Midrange PMO levels have the primary responsibility of establishing processes that facilitate the identification, acquisition, assignment, and performance manage- ment of project resources. The processes may vary for organizations where business unit resource managers control project resources in contrast to those assigned “full time” to project managers or to the PMO. In either case, the midrange PMO is responsible for developing the means for project managers to obtain the project

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